Chapter 9 or 22 Perfect competltfon: Pre - Class E. In - Class Activities Packet HamellJJ. Number: Section: Date: Part 3 . Dlscusslon Emotions and Problems 1. Tme or false: The rm's entire marginal cost curve is its shoIt-run supply cu rye. Explain your answer. 2. Tme or false: In a perfectly compelitjye market, rms always operate at the lowest per-unit cost Explain your answer. 3. For a perfectly competitive rm, prot maximization does not conflict with resource allocatiye efficiency. Do you agree? Explain your answer. 4. You read in a business magazine that computer rms are reaping high prots. 1illth the theory of perfect competition in mind. what do you expect to happen over time to the following: Assuming that the computer industry is perfectly competitive {or at least acts as if it is}, we would expect the ofeconomic prots to attract new entrants into the market. This would. in turn. shift the market supply cunre rightward, increasing sales. decreasing prices, and slashing prots. [at Computer prices {til The prots of computer rms {c] The number of computers on the market id: The number of computer rms in the market 5. In your own words, explain resource allocatiye etciency. 6. Explain why a perfectly competitjye rm will shut down in the short run if price is lower than ayerage I.Iaria ble cost, but it will continue to produce if price is below ayerage total cost but above ayerage variable cost T. Prot senres as both an incentiye and a signal. Explain