From the coffee shop business model we've been cultivating since our first week, this week you're going to apply it to perfect competition discussed in our lesson notes and chapter. Now, the firm may not "operate" in an environment of perfect competition given the nature of the product/service. However, even it that's the case, still apply the tenets to the company just so you're aware that perhaps, one day, the company may experience such a market. If that be the case, you'll know what to expect.

...so then, relate the following to the coffee shop business in a one-page essay:

• Why firms can "enter" or "exit" from the market without great cost
• "Why" the product is homogenous to the consumer.
• "Why" we have no influence over the market price.
• "Why" we face consumers with "horizontal demand curves" and the impact of that reality on the price and marginal revenue.
• "How" additional competitors affect the price of the product/service.
• If MC, ATC, fall and rise "what" happens to profits and "why."
• "When" it might be time to "leave" the industry.

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