There are three dotted lines on the chart representing three different prices for the product: a, b and c.Remember that in a Purely Competitive market, the Price equals the Marginal Revenue.

Use this chart to answer the following questions.Be sure to use the characteristics of a Purely Competitive market to explain your answers.

Question 3 Part 1

If the price is equal to line a, what can you say about the company's efficiency? What can you say about its economic profit or loss in the short run?Is this likely to change in the long run?Why?

Question 3 Part 2

If the price is equal to line b, what can you say about the company's efficiency? What can you say about its economic profit or loss in the short run?Is this likely to change in the long run?Why?

Question 3: Pure Competition [this question has 3 partsl This chart represents a Purely Competitive market: 5400 S350 5300 $250 $200 5150 There are three dotted lines on the chart representing three different prices for the product: a, b and 0. Remember that in a Purely Competitive market, the Price equals the Marginal Revenue. Use this chart to answer the following questions. Be sure to use the characteristics ofu Purely Competitive market to explain your answers. Question 3 Part 1 If the price is equal to line a, what can you say about the company's efficiency? What can you say about its economic prot or loss in the short run? 15 this likely to change in the long run? Why? Type your answer and explanation here: Question 3 Part 2 If the price is equal to line b, what can you say about the company's efficiency? What can you say about its economic prot or loss in the short run? Is this likely to change in the long run? Why? Type your answer and explanation here: Question 3 Part 3 Type your answer and explanation here