The following questions are short answer questions. Clearly "explain" your ideas.

1. Explain why firms operating in a competitive market tend to use their limited resources "more efficiently" when producing their goods and services.

2. Explain why a firm should NOT shut down - at least in the short run -when it can no longer cover their total cost.

3. Calculate the average total, fixed, and marginal costs for a "competitive" firm with the following production cost schedule.

Q Total Cost ATC AFC MC

0 10

10 12

20 16

30 24

40 38

50 50

60 100

3.bWhat output or q is the most efficient production level?

3.cIf the market price (P) is $1.20 per unit sold, then what output or q should the firm produce?

4. Explain why the four-firm concentration ratio and HHI can fail to detect abuse of market power?

5. Explain why most firms cannot charge different prices to different segments in the market.

6. Explain why firms who sell "elastic goods" tend to lower their prices when they try to increase their sales revenue?

7.Discuss why T-Mobile and Spring merger may begoodfor the consumers and the market.Be sure to elaborate on two specific benefits.