Week 10 — Assignment (Adaptive Learning) · Perfect Competition Problem Set

Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Objective 6 · SLO A & B · Assignment 10 of 14 · 100 points
This is the configured (adaptive) variant. An AI coach gives you the problems one at a time, grades each against an embedded rubric, lets you retry a fresh version, and produces a self-scored report. You submit the report (first line STUDENT'S SCORE: X/100) + your chat share link. (The traditional, instructor-graded version is in I-assignment-and-rubric-week-10-traditional.md.)

How to run this

1. Open an approved chatbot (Gemini, Claude, ChatGPT). Copy the whole gray box and paste it as one message.
2. Solve each problem; the coach grades it, teaches the gaps, and offers a fresh variant to raise your score.
3. When you get the report, submit it (it starts with STUDENT'S SCORE: X/100) plus your chat share link in Canvas. Due Sun, Nov 8.

You are my assignment coach and grader for Week 10 of Principles of Microeconomics (ECON 1)
at Silver Oak University. Give me the problems below ONE AT A TIME, let me solve each, grade
my answer against the rubric, show me how to improve, and let me re-try a fresh version to
raise my score. Grade ONLY against the answer key and rubric below — never invent problems,
answers, or scores. Redo any arithmetic yourself and SHOW YOUR WORK before telling me I'm
wrong. Score honestly; a wrong answer scores low, a strong answer earns full marks.

START: greet me in 1–2 sentences, ask my FIRST NAME, then give Problem 1 exactly as written.
If I answer without giving my name, keep going but ask before the final report. ONE problem
at a time; never show the whole set, the answers, the variants, or the rubric. After each
answer: grade it, say what I did well, TEACH the gap, then offer a re-attempt on the FRESH
VARIANT (update my score to my BEST attempt, capped at full marks). Judge meaning, not
wording. Every message ends with a problem, a question, or a next step.

COST SCHEDULE FOR THIS ASSIGNMENT (FC=60):
  Q=1: VC=40, TC=100, AVC=40, ATC=100, MC=40
  Q=2: VC=70, TC=130, AVC=35, ATC=65,  MC=30
  Q=3: VC=90, TC=150, AVC=30, ATC=50,  MC=20
  Q=4: VC=120, TC=180, AVC=30, ATC=45, MC=30
  Q=5: VC=160, TC=220, AVC=32, ATC=44, MC=40
  Q=6: VC=210, TC=270, AVC=35, ATC=45, MC=50
  Min AVC = 30 at Q=3. Min ATC = 44 at Q=5. FC = 60.

================= PROBLEM 1 (25 pts) — Find Q where P = MC =================
PROBLEM: "Using the cost schedule above, the market price is $50. (a) Identify the
  profit-maximizing output by finding where P = MC on the RISING arm of the MC curve.
  (b) State which Q values have MC=50 and explain why you choose the one on the rising arm
  and not any other."
VETTED ANSWER: (a) MC at Q6=50 on the rising arm → profit-maximizing Q = 6. (b) The MC
  sequence is 40(↓), 30, 20, 30(↑), 40, 50. The rising arm begins at Q=4 and goes up
  through Q=5 (MC=40) and Q=6 (MC=50). There is no Q on the falling arm where MC=50.
  Q=6 is the unique rising-arm point where MC=P=50.
RUBRIC: 25 = correct Q=6 identified, rising-arm logic explained. 15–20 = correct Q, weak
  explanation. 8–14 = right idea but picks Q on falling arm or unclear. 0–7 = wrong Q.
FRESH VARIANT: "Market price = $30. Find the profit-maximizing Q." ANSWER: MC=30 occurs at
  Q=2 (falling, MC dropping to 30) and at Q=4 (rising, MC back up to 30). Rising-arm Q=4.

================= PROBLEM 2 (25 pts) — Compute profit or loss =================
PROBLEM: "At P=$40, you found Q=5 in lecture. Now compute: (a) TR, (b) TC, (c) profit or
  loss. Then use the formula (P − ATC) × Q to verify your answer."
VETTED ANSWER: (a) TR = 40 × 5 = 200. (b) TC = 220 (from table). (c) Profit = 200 − 220
  = −20 (a loss of $20). Verification: (40 − 44) × 5 = −4 × 5 = −20. ✓ Interpretation:
  the firm covers its variable costs (VC=160) and contributes $40 toward FC; it loses $20
  overall but that is less than the FC of $60 it would lose by shutting down.
RUBRIC: 25 = TR, TC, profit all correct + verified via (P−ATC)×Q + a sentence of
  interpretation. 15–20 = all three numbers right, verification missing or no interpretation.
  8–14 = arithmetic slip in one figure. 0–7 = wrong TR or TC or both.
FRESH VARIANT: "At P=$50, Q=6. Compute TR, TC, and profit; verify with (P−ATC)×Q."
ANSWER: TR=300, TC=270, profit=+30. (50−45)×6=+5×6=+30. ✓

================= PROBLEM 3 (25 pts) — Shutdown decision =================
PROBLEM: "Consider three market prices: P=$25, P=$40, P=$50. For each: (a) state whether
  the firm should operate or shut down in the short run, and (b) briefly explain your
  reasoning using the shutdown rule (compare P to min AVC = $30)."
VETTED ANSWER: P=$25: 25 < min AVC=30 → SHUT DOWN. Every unit loses money on variable
  costs alone; shutdown limits loss to FC=$60. P=$40: 40 > 30 → OPERATE. Loss=$20 <
  FC=$60; operating is better. P=$50: 50 > 30 → OPERATE. Profit=+$30; operating is clearly
  better. Key: the shutdown threshold is min AVC=$30, not ATC.
RUBRIC: 25 = all three correct with shutdown-rule reasoning (P vs. min AVC) for each. 15–20
  = two correct with reasoning, one missing or wrong. 8–14 = correct decisions, shutdown
  rule not clearly invoked (e.g., says "compare to ATC"). 0–7 = two or more wrong.
FRESH VARIANT: "Same shutdown rule. P=$30, P=$45, P=$22. Operate or shut down?"
ANSWER: P=$30: 30 = min AVC → OPERATE (just covers variable costs). P=$45: 45>30 → OPERATE.
  P=$22: 22<30 → SHUT DOWN.

================= PROBLEM 4 (25 pts) — Long-run entry/exit reasoning =================
PROBLEM: "At P=$50 the firm earns a profit of $30. Explain what happens in the LONG RUN in
  a perfectly competitive market: (a) what do other firms do in response to positive profit,
  (b) what happens to market supply and the market price, (c) where does the price settle
  and why, and (d) what is the economic profit at that long-run equilibrium? Label any
  claims that are value judgments vs. factual economic predictions."
VETTED ANSWER: (a) New firms ENTER — free entry means no barrier stops them from earning
  profit. (b) Market supply INCREASES (shifts right), market price FALLS. (c) Price settles
  at P = min ATC = $44 — the long-run equilibrium price where entry stops (zero profit
  eliminates the incentive to enter). (d) Economic profit = 0 at P=$44: (44−44)×5=$0.
  All of (a)–(d) are POSITIVE statements — factual predictions of the model. A normative
  statement would be "markets should be more competitive" — that is a value judgment.
RUBRIC: 25 = all four parts correct + positive/normative distinction clearly applied. 15–20
  = all four parts correct, positive/normative distinction weak. 8–14 = correct direction of
  adjustment (entry, supply up, price down) but wrong LR price or misses zero-profit result.
  0–7 = direction wrong or major confusion.
FRESH VARIANT: "At P=$40 the firm loses $20. Explain the long-run adjustment."
ANSWER: (a) Firms EXIT. (b) Supply DECREASES, price RISES. (c) Price rises to P=min ATC=$44.
  (d) Zero economic profit. Same positive/normative labeling applies.

================= COMPLETION =================
After all four problems (and any re-attempts), produce EXACTLY:
    STUDENT'S SCORE: X/100
    WEEK 10 ASSIGNMENT — Perfect Competition
    Student: [name] | Date: ___
    Problem 1: a/25 — [one-line note]
    Problem 2: b/25 — [one-line note]
    Problem 3: c/25 — [one-line note]
    Problem 4: d/25 — [one-line note]
    Strongest skill: ___
    Worth another look: ___
Then say, verbatim: "Copy this entire report AND your share link to this chat, and submit
both in Canvas for this assignment." End with one genuine sentence of encouragement.

Instructor grading note + rubric (for Canvas)

Record the AI score (line 1); spot-check a sample against the chat share link. Summary rubric (each problem to 25, total 100):

Quality gate (self-checked): all numbers pre-computed/verified — P1 Q6 rising-arm MC=50 ✓; P2 TR=200, TC=220, profit=−20, (40−44)×5=−20 ✓; variant TR=300, TC=270, profit=+30, (50−45)×6=+30 ✓; P3 min AVC=30 → P=25 shut down, P=40 operate, P=50 operate (all verified against FC=60 comparison); P4 long-run P=min ATC=44, profit=(44−44)×5=0 ✓. Shutdown uses AVC not ATC; P=MC uses rising arm not falling arm; positive/normative distinction embedded in P4.

Canvas placement block

canvas_object    = Assignment
title            = "Week 10 Assignment — Perfect Competition (adaptive)"
assignment_group = "Assignments"
points_possible  = 100
grading_type     = points
submission_types = [online_text_entry, online_url]
due_offset_days  = 6
published        = true
submission_note  = "Paste the AI summary report (score on line 1) + the chat share link."
provenance       = "~ Prof. Kessler's edition · Fall 2026 · built with thecoursemaker.com"

Traditional variant — for comparison. This course is configured adaptive learning, so the actual Week-10 assignment is the AI-coached version in I-assignment-and-rubric-week-10.md. This file shows the same problem set built the traditional way — students complete it and submit; the instructor grades against the rubric. (Choosing assignment_type = traditional at setup generates this style.)

Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Objective 6 · SLO A & B · Assignment 10 of 14 · 100 points · Due Sun, Nov 8

The Cost Schedule (for all four problems)

FC = $60. Use this table:

Min AVC = $30 at Q=3. Min ATC = $44 at Q=5. FC = $60.

Show all work and write interpretations in complete sentences.

Problem 1 — Find the profit-maximizing output (25 pts). The market price is $50. (a) Using the P = MC rule on the rising arm of the MC curve, identify the profit-maximizing output. (b) Explain why you choose that Q and not any other Q where MC might also equal $40 (if applicable) — specifically, what does "rising arm" mean and why does it matter?

Problem 2 — Compute profit or loss (25 pts). At a market price of $40, the profit-maximizing output is Q = 5. Compute: (a) TR, (b) TC, (c) profit or loss. Then verify using the formula (P − ATC) × Q. In one sentence, interpret what the number means — don't just write the dollar figure.

Problem 3 — Apply the shutdown rule (25 pts). Consider three prices: P = $25, P = $40, P = $50. For each price: (a) state whether the firm should operate or shut down in the short run, and (b) explain your reasoning by comparing P to the minimum AVC (not ATC). State the shutdown price explicitly.

Problem 4 — Long-run entry/exit (25 pts). At P = $50, the firm earns a profit of $30. Explain what happens in the long run in a perfectly competitive industry: (a) what do other firms do, (b) what happens to market supply and price, (c) where does the price eventually settle, and (d) what is the economic profit at the long-run equilibrium? In your explanation, label at least one positive claim (a factual prediction of the model) and one normative claim that someone might add (a value judgment) — and keep them clearly separate.

AI note. This is the traditional format — submit your own work. You may use an approved chatbot to check a definition or verify a calculation, but add a one-line note of which tool and how. (In the adaptive version, working the problems with the AI coach is the activity.)

Grading rubric — 100 points

Instructor answer key & worked solutions — REMOVE BEFORE PUBLISHING TO STUDENTS

• P1: MC sequence (rising arm): Q4=30↑, Q5=40↑, Q6=50. At P=$50: MC=50 at Q=6 on the rising arm. There is no falling-arm Q with MC=50. "Rising arm" means MC is increasing — once past the MC minimum (Q=3, MC=20), MC rises from Q=4 onward. Profit is maximized only on the rising arm because on the falling side each additional unit still adds more to revenue than cost; the true profit max is where MC has reversed and is climbing to meet P. (Verified: see Python check.)
• P2: TR = 40 × 5 = $200. TC = $220. Profit = 200 − 220 = −$20 (loss). Verification: (40 − 44) × 5 = −4 × 5 = −20 ✓. Interpretation: "The firm loses $20 — but since FC = $60, operating is still better than shutting down."
• P3: Min AVC = $30 (at Q=3). Shutdown rule: operate if P ≥ min AVC; shut down if P < min AVC.
• P=$25: 25 < 30 → SHUT DOWN (can't cover variable costs; loss = FC = $60 either way, but producing would add losses on VC too).
• P=$40: 40 > 30 → OPERATE (loss = $20 < FC = $60; operating saves $40).
• P=$50: 50 > 30 → OPERATE (profit = $30). (All verified.)
• P4: (a) New firms enter (free entry means no barrier). (b) Industry supply increases, market price falls. (c) Price settles at P = min ATC = $44 (entry stops when profit = 0). (d) Economic profit = (44 − 44) × 5 = $0. Positive claim: "When price exceeds ATC, new firms enter and price falls." Normative claim (example): "Markets should be more competitive so consumers benefit." These are separate — the positive claim is a model prediction; the normative claim is a value judgment about what's desirable. (Verified.)

Quality gate (self-checked): all numbers Python re-computed — P1 Q6 rising-arm ✓; P2 −20 double-checked ✓; P3 all three shutdown decisions verified against min AVC=30 and FC=60 ✓; P4 long-run P=44, profit=0 ✓.

Canvas placement block

canvas_object    = Assignment
title            = "Week 10 Assignment — Perfect Competition (traditional)"
assignment_group = "Assignments"
points_possible  = 100
grading_type     = points
submission_types = [online_upload, online_text_entry]
due_offset_days  = 6
rubric_ref       = "w10-assignment-rubric"
published        = true
provenance       = "~ Prof. Kessler's edition · Fall 2026 · built with thecoursemaker.com"