Question: A perfectly competitive firm will set MR = MC in order to maximize profit in the short run. 1. Graphically show a perfectly competitive firms

A perfectly competitive firm will set MR = MC in order to maximize profit in the short run.
1. Graphically show a perfectly competitive firm’s profit maximizing price and quantity.
2. Explain whether or not perfectly competitive firms exhibit resource allocative efficiency.
3. Explain how the perfectly competitive firm decides whether to operate or shut down in the short run.

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