Explain why a fast-food restaurant often displays characteristics of perfect competition.

Attempts 2. Profit maximization of a seller in a competitive price-searchermarket Consider Unico Doughnut, a doughnut shop in a competitive price-searcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. If the shop is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. If the shop is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 4.00 (nuчßno 3.50 3.00 2.50 Q Search Profit Maximizing Outcome Profit

Explain why a perfectly competitive firm would or would not advertise.

Ben opened his ice cream stand and he aims to maximize profits by making 100 ice cream cones a day. Ben planned to buy two ice cream makers, but his sister happened to have an extra one and she gave it to him for free. Ben's fixed costs decrease and the market price remains constant. The short run profit maximizing level of output a day a) becomes zero b) is still 100 ice cream cones c) is more than 100 ice cream cones d) is less than 100 ice cream cones