Suppose there are 500 identical vendors selling T-shirts at an Ozzie Osborneconcert in State College. All vendors pay $5 dollars per T-shirt to their supplierand $20 for the right to sell at the concert. Vendors have no other costs. Atthe end of the day, you (the concert organizer) observe that each vendor sold20 T-shirts and that the price of a T-shirt was $6.00. Is this a perfectly competitive market? Explain

yes

It is a perfect competition for the following reasons

It is a perfect competition because there are many sellers

Each seller sells at identical prices

The goods sold is homogenous . All the shirts are the same

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.  

In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

this is all on your opinion. you choose what you want to do.

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.