Directions: The following is a free response question released by the College Board from a previous AP exam to be used as practice for future
exams. You can complete the assignment in this document, using the
drawing tools in Word (or any photo editing program) or print this
document, and complete the activity by hand, submitting a scan or photo
of your work. When you are done, submit the assignment for grading by
your instructor. This question will be graded out of 12 points.
1. J&P Company operates in a perfectly competitive market for smoke
alarms. J&P is currently earning short-run positive economic profits.
(a) Using correctly labeled side-by-side graphs for the smoke alarm
market and J&P Company, indicate each of the following for both
the market and the J&P Company.
(i) Price
(ii) Output