Econ 98- Chiu Spring 2004Quick Review Questions- Explain. Why is the Stage 1 market supply curve upward sloping? Why is the Stage 2 market supply curve flat at the minimum average cost?- True, false, or uncertain. Assume Stage 1 perfect competition. Each firm prices at the same market price, but each firm can produce different quantities.- True, false, or uncertain. When average cost (AC) shifts up, then marginal cost (MC) also shifts up.- Graph and explain. Assume perfect competition. The market price for CD players is $70 in Stage 1. The firm produces q1. The average cost of producing q1 is $100. What is the price ofCD players in Stage 2?Econ 98- Chiu Spring 2004Quick Review Questions- Graph and explain. Draw a typical market supply and demand graph for oranges. Assume a downward demand curve and an upward supply curve. Label the market equilibrium: P*, Q*. Producers are willing to sell 50 oranges at $100, but consumers are willing to buy 50 oranges at $70. Label 50 oranges as Q1. Is Q1 below or above Q*? What is the final price of
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