Fill in the blanks to make the following statements correct. 1. a) The demand curve faced by a single firm in a perfectly competitive market is ____. b) The demand curve faced by a single firm in a perfectly competitive industry coincides with the firm's____ curve and its _____ curve. c) Total revenue is calculated by multiplying ____ and ___. Average revenue is calculated by dividing ____ by ____. Marginal revenue is calculated by dividing ____ by _____. d) A firm's loss when it produces no output is equal to its ____.

2. For EACH of the following observed facts about an industry, state whether they are inconsistent or consistent with it being a perfectly competitive industry? a) Different firms use different methods of production. b) The industry's product is extensively advertised by an industry association. c) Individual firms devote a large fraction of their sales receipts to advertising their own product brands. d) There are 24 firms in the industry. e) The largest firm in the industry makes 40 percent of the sales, and the next largest firm makes 20 percent of the sales, but the products are identical, and there are 61 other firms. f) All firms made large profits last year.

3. Fill in the blanks to make the following statements correct.

3. a) If all firms in an industry joined together and behaved as a single seller, they could maximize their joint ___. We refer to such a group as a(n) ___. b) To maximize joint profits, a cartel must reduce ___ and raise ___, compared to the perfectly competitive levels. c) Cartels tend to be unstable because any individual firm has an incentive to ___ by selling ___ than the agreed-upon output. d) If a cartel is to succeed in the long run it must restrict ___ by new firms. e) Taxi industries in most cities were effectively government sanctioned ___ before they were challenged by innovative new firms like Uber and Lyft.

4. 4. Consider each of the following examples in which a firm sells the same product to different customers at different prices. Identify in each case whether price discrimination is likely to be taking place. If it is unlikely that price discrimination is occurring, what explains the different prices? a) Weekend airline fares that are less than weekday fares. b) Business-class airline fares that are 150 percent higher than economy-class fares. (Recognize that two business-class seats take the same space inside the plane as three economy-class seats.) c) Discounts on furniture negotiated from the "suggested retail price" for which sales personnel are authorized to bargain and to get as much in each transaction as the customer is prepared to pay. d) Higher tuition for MBA students whose tuition is financed by their employers.