Answer the following questions based off of the graphs above, which depict a perfectly competitive industry and firm. Assume that fixed costs (FC) for the firm are $400:

Where would a perfectly competitive firm operate in terms of quantity produced?

Why would a firm would operate at that specific quantity, and not at a higher or lower quantity?

A firm would produce 70 units; The firm will operate at 16 units because below or above 16 units MC=MR

A firm would produce 16 units; The firm will operate at 16 units because below or above 16 units MC>MR or MC

A firm would produce 16 units; The firm will operate at 16 units because below or above 16 units MC=MR

A firm would produce 82 units; The firm will operate at 16 units because below or above 16 units MC>MR or MC

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