Micro Topic 3.7 Perfect Competition Part 1: Irue or Ealse- Assume that you and your cousin, Tommy, inherit your uncle's brake pad business. Below is a list of statements made by Tommy. identify which statements are false and write a sentence mal corrects his misunderstanding. Assume that your brake pads are sold in a perfectly competitive market. 1. \"The additional cost of brake pads will initially decrease then increase as more are produced." 2. "We should produce brake pads as long as our average total cost (ATC) is falling.\" 3. \"if we increase the price of our brake pads we will make more prot." 4. "In the long-run, the average total cost of each brake pad will equal the price of each brake pad.\" 5. \"We should shut down if we make a loss in the shalt run." Part 2: Gra h Pr ctice- Assume that the market price of brake pads is $40. Use the cost curves bet your rm to answer the questions. 6. If the price is $40. what is the prot maximizing quantity for your rm? .52- $60 :IIIIIIIIIIIIEEI- 7. Calculate the total cost at the prot $50 ===========EE&%= maleIZlng quantity. $40 =E======Pagyia== 8. Calculate the prot or loss at the prot A , 4 maximizing quantity. $30 I=:l-'2!a===== 9. How much prot will you earn if you $20 increase your price $10 higher than the market price? $10 10. What is the prot maximizing price III-I'lllll-lll D 5 6 7 8 9 10 11 and quantity in the long-run? C 11. If the market price is $25, will your rm earn economic prot, accounting prot. neither, or both