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Could someone answer these questions briefly? 1) Describe a competitive firms supply curve, and explain why...

Could someone answer these questions briefly?

1) Describe a competitive firms supply curve, and explain why it is upward sloping. Also, explain why a competitive firm faces a horizontal marginal revenue curve.

2) What are long-run economic profits equal to in a competitive market (be sure to explain why and to not just give a number)? Also, explain why in long-run equilibrium price in a competitive market is equal to the minimum of average total cost.

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Answer #1

1) In the perfect competation firm is the price taker hence MC curve of the firm is supply curve firm will supply th goods till MC=P since the firm can not influence the price elasticity demand is very high hence AR and MR curve of the firm is horizontal because Price is uniform for all the goods and units he sold in the market.

2) In long run, perfect competation firm makes the normal profit because of the existence of the large numbers for the firm it is the optimal level output where P=AVC minimum point.

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