Micro Chapter 14 【Firms in Competitive Markets】

1. Characteristics of competitive markets
The model of competitive markets relies on these three core assumptions: Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why 

2. The demand curve facing a competitive firm
The following graph shows the daily market for medium cardboard boxes in San Francisco. Based on the preceding graph showing the daily market demand and supply curves, the price

3. Profit maximization using total cost and total revenue curves
Suppose Jacques runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan.

4. Profit maximization in the cost-curve diagram
Suppose that the market for blenders is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.

5. Profit maximization and shutting down in the short run
Suppose that the market for dress shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.

6. Deriving the short-run supply curve
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry.





7. Short-run supply and long-run equilibrium
Consider the competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.

8. Short-run and long-run effects of a shift in demand
Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 250 million pounds per year. Suppose that WebMD claims that a protein found in chicken will increase your expected lifespan by 3 years.