A perfectly competitive industry is composed of 100 identical firms with cost structure:   q          TC          VC          FC          AVC          ATC          MC   0           4 1           8 2          10 3          14 4          20 5          28 6          38     b) Assuming that the market price is p = 8, what are the quantity produced by each firm and the profit it makes?

A perfectly competitive firm will choose to shut down when the average total cost intersects the marginal cost curve below the average variable cost curve

a.Suppose a perfectly competitive firm can produce10000 bushels of corn a year at an output at which marginal revenue is equal to marginal cost. The market price of corn per bushel is $2. The firm's total costs per year are $30000 and fixed costs per year are $15000. Show and explain which of the following is true: In the short run, this firm should a) Produce 20000 bushels to try to increase economic profit. b) Produce 10000 bushels of corn because, although they are losing money, they are losing less than if they shut down. c)Shut down. d) Continue producing until the price of corn increases.       b.A perfectly competitive firm, with MC=q operates in a market character,zed by the following market demand and supply conditions: Demand: Q=20000-100P Supply: Q=100P   How much output does this competitive firm produce to maximize profit? Show your work graphically and algebraically.

In competitive markets economic profit becomes zero in the long-run. However, it is also possible for some firms to earn a greater accounting profit and to enjoy a higher producer surplus than other firms. How is it possible?