Draw the curves we'd use to determine the profit- maximizing quantity for a firm in a...

 

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Draw the curves we'd use to determine the profit- maximizing quantity for a firm in a competitive market (careful - draw the one for a firm in a competitive market, not one with pricing power!). Draw it such that we'd expect that firms will want to enter the market. 1/2 point each for: 1. Drawing the AC, MC, and D curves properly (make AC and MC intersect properly or you'll lose this 1/2 point) 2. Correctly finding the profit-maximizing quantity Q* and labeling it 3. Correctly drawing and shading in profit (this will require properly finding the AC value). 4. Doing steps 1-3 in such a way that firms will want to enter the market Draw the curves we'd use to determine the profit- maximizing quantity for a firm in a competitive market (careful - draw the one for a firm in a competitive market, not one with pricing power!). Draw it such that we'd expect that firms will want to enter the market. 1/2 point each for: 1. Drawing the AC, MC, and D curves properly (make AC and MC intersect properly or you'll lose this 1/2 point) 2. Correctly finding the profit-maximizing quantity Q* and labeling it 3. Correctly drawing and shading in profit (this will require properly finding the AC value). 4. Doing steps 1-3 in such a way that firms will want to enter the market

Answer rating: 100% (QA)

Industry in Perfect Competition Firm in Perfect Competition Pri... View the full answer