MICROECON PERFECT COMPETITION The following problems trace the relationship between firm decisions, market sup- ply, and market equilibrium in a perfectly competitive market. X 1. Complete the following table for a single firm in the short run: ATC. MC OUTPUT TVC TC AVC TFC $300 $0 $100 $150 $210 $290 $400 FOR # 1 up $540 $720 ALSO $950 $1240 SKETCH $1600 THE GRAPHS 2. Using the information in the table, fill in the supply schedule below for this individ- ual firm under perfect competition, and indicate profit (positive or negative) at each OF 2 output level. (Hint: At each hypothetical price, what is the MR of producing one more unit of output? Combine this with the MC of another unit to figure out the ( i ) FC, TVC, quantity supplied.) QUANTITY TC ON PRICE SUPPLIED PROFIT THE SAME $50 $70 PLANE $100 $130 $170 ( ii ) AFC , AVC, $220 $280 NIN ATC AND $350 MC ON THE SAME 3. Now suppose there are 100 firms in this industry, all with identical cost schedules. Fill in the market quantity supplied at each price in this market: PLANE NN MARKET MARKET PRICE QUANTITY SUPPLIED QUANTITY DEMANDED $50 LOO MUST SPACE $70 11 900 $100 300 YOUR ANSWERS $130 700 $170 500 AND USE $220 500 $280 400 CLEAN $350 300 SHEETS OF PAPER 4 . Fill in the blanks: From the market supply and demand schedules above, the equilib NIN rium market price for this good is - and the equilibrium market quantity is SHOW ALL Each firm will produce a quantity of . and earn a (profit/loss) equal to STEPS In 4. above, your answers characterize the short-run equilibrium in this market. Do IN they characterize the long-run equilibrium as well? If yes, explain why. If no, explain why not (i.e., what would happen in the long run to change the equilibrium, CAF Ted