10 for sc

Suppose that at 500 units of output marginal revenue is equal to marginal cost. The firm is selling its output at $5 per unit and average total cost at 500 units of output is $6. On the basis of this information, we:

C. cannot determine whether the firm should produce or shut down in the short run.

Suppose you find that the price of your product is less than minimum AVC. You should:

C. close down because, by producing, your losses will exceed your total fixed costs.

Other things equal, an increase of product price would be shown as:

an increase in the steepness of curve (3), an upward shift in curve (2), and an upward shift in curve (1).

The fact that a purely competitive firm's total revenue curve is linear and upsloping to the right implies that:

product price is constant at all levels of output.

The lowest point on a purely competitive firm's short-run supply curve corresponds to:

the minimum point on its MC curve.

The firm represented by the diagram would maximize its profit where:

the vertical distance between curves (3) and (4) is the greatest.

Economists use the term imperfect competition to describe

those markets that are not purely competitive

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its:

total variabl costs

A purely competitive firm's short-run supply curve is:

upsloping and equal to the portion of the marginal cost curve that lies above the ATC curve.

In the short run, a purely competitive firm that seeks to maximize profit will produce:

where total revenue exceeds total cost by the maximum amount

If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:

will also be $5

Which of the following is characteristic of a purely competitive seller's demand curve?

Price and marginal revenue are equal at all levels of output

For a purely competitive seller, price equals:

all of these. AR MR TR/Q

Economists would describe the U.S. automobile industry as:

an oligopoly

. Curve C represents:

average revenue and marginal revenue

The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.

downsloping, perfectly elastic

Price is constant to the individual firm selling in a purely competitive market because:

each seller supply a negligible fraction of total supply

The marginal revenue curve of a purely competitive firm

is horizontal at the market price

Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation:

is realizing an economic profit of $40.

Which of the following statements applies to a purely competitive producer?

it will not advertise its product

If a purely competitive firm shuts down in the short run:

it will realize a loss equal to its total fixed costs.

If a purely competitive firm is producing at some level less than the profit-maximizing output, then:

marginal revenue exceeds marginal cost.

A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating:

marginal revuene and marginal cost

When a firm is maximizing profit, it will necessarily be:

maximizing the difference between total revenue and total cost

An industry comprised of 40 firms, none of which has more than 3 percent of the total market for a differentiated product, is an example of:

monopolistic competition

An industry comprised of a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions, is called:

oligopoly

An industry comprised of four firms, each with about 25 percent of the total market for a product, is an example of:

oligopoly

In which of the following market structures is there clear-cut mutual interdependence with respect to price-output policies?

oligopoly

The demand schedule or curve confronted by the individual, purely competitive firm is:

perfectly elastic

Which of the following is not a characteristic of pure competition?

price strategies by firms

a purely competitive seller is:

price taker

A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:

produce because the resulting loss is less than its TFC.

On a per unit basis, economic profit can be determined as the difference between

product price and average total cost.

In which of the following industry structures is the entry of new firms the most difficult?

pure monopoly

For a purely competitive firm, marginal revenue graphs as a:

straight line, parallel to the horizontal axis

For a purely competitive firm, total revenue graphs as a:

straight, upsloping line

For a purely competitive firm:

the demand and marginal revenue curves will coincide

firms seek to maximize

total profit

A firm reaches a break-even point (normal profit position) where:

total revenue and total cost are equal.

The demand curve for a purely competitive firm is perfectly elastic, but the demand curve for a purely competitive industry is downsloping.

total revenue only

If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be:

3 UNITS.

The profit-maximizing output for this firm is:

320 because it is where TC and TR are furtherest apart

For a purely competitive firm, total revenue:

A. is price times quantity sold. B. increases by a constant absolute amount as output expands. C. graphs as a straight upsloping line from the origin. D. has all of these characteristics.

Which of the following industries most closely approximates pure competition?

Agriculture

purely competitive demand

- perfectly elastic demand - firms produce as much or as little as they wish at the market price - demand graphs as horizontal line

In the short run, the individual competitive firm's supply curve is that segment of the:

B. marginal cost curve lying above the average variable cost curve.

If a firm is confronted with economic losses in the short run, it will decide whether or not to produce by comparing:

B. price and minimum average variable cost.

A perfectly elastic demand curve implies that the firm:

can sell as much output as it chooses at the existing price.

Marginal revenue is the:

change in total revenue associated with the sale of one more unit of output

Which of the following is not a basic characteristic of pure competition?

considerable nonprice competition

Which of the following is not a valid generalization concerning the relationship between price and costs for a purely competitive seller in the short run?

A. Price must be at least equal to average total cost.

The MR = MC rule can be restated for a purely competitive seller as P = MC because:

A. each additional unit of output adds exactly its price to total revenue.

In the short run, a purely competitive firm will always make an economic profit if:

D. P > ATC.