Well, for the first question (P195), the author should be shot: the market is composed of three companies, or the market comprises three companies.
If they make an easily replicable product unprotected by brank (bran d , perhaps?) recognition or patents, then there are a lot of potential competitors, and low barriers to entry. Pure competition recognizes both actual competitors and _ potential competitors _.
I don’t have my Econ book handy, but the price function (P = 93 – 1.5Q) is the average price, not the marginal price. It may be that in the formula MC = AC = P, the price here is the marginal price. I’ll research that and re-reply.
It is saying that this is the demand schedule (negative slope meaning downward sloping). This is conflicting with the fact that it is a perfectly competitive market (meaning that the demand schedule should be an horizontal line). Also need some clarification on this.
In Perfectly competative markets, Equilibrium price and quantity are determined by Market demand curve and supply curve. The Market demand curve ( Demand curve faced by the industry) is downward sloping and the market supply curve is upward sloping.
Each firm in perfect competition is very small compared to the size of the market. actions of the firm will have no impact on the market equilibrium. They are price takers ie they can sell any Q at the the equilibrium price. Hence the demand curve faced by each individual firm is horizontal.