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Perfect competition

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Question 8

The diagram below represents a perfectly competitive industry (market) and four possible individual firm-level response graphs (Graph A, Graph B, Graph C, and Graph D). Initially, both the market and the firm are in long-run equilibrium.

Perfect Competition Industry and Firm Diagrams

Which of the firm-level graphs (Graph A, Graph B, Graph C, or Graph D) correctly illustrates the short-run response of an individual profit-maximising firm to the market shift shown in the Market Diagram?

Graph B

Graph A

Graph C

Graph D

Perfect competition Questions

  1. A Level
  2. /Economics
  3. /Perfect competition