Econ quiz 5
A profit-maximizing firm will shut down in the short run when
Price < average variable cost
Which of the following statements is correct regarding a firms decisionmaking?
The decision to shut down is a short-run decision, whereas the decision to exit is a long-run decision.
Which of the following is not a characteristic of perfect competition?
brand name advertising
If Harry's Blueberries, a perfectly competitive firm, shuts down in the short run, Harry must pay
only the fixed costs
Economic theory assumes that the goal of firms is to maximize
profit
If a firm in a competitive market increased its output by 20 percent, the price of its output is likely to
remain unchanged
The short-run supply curve for a purely competitive firm is
the segment of the MC curve lying about the AVC curve
Total profit for a firm is calculated as
total revenue minus total cost
At the profit-maximizing output level, the firm represented in the graph above experiences
a loss of $3,200
Which of the following firms is most likely to be perfectly competitive firm?
a soybean farmer
In a competitive market, no single producer can influence the market price because
many other sellers are offering a product that is essentially identical
What is the marginal cost of the 8th unit?
$120
What is the marginal revenue from selling the 3rd unit?
$120
What is Soper's Port Vineyard's economic profit at their profit maximizing point?
$278
Which point in Exhibit 0121 indicated the quantity at which this firm will maximize profit?
Point C
In the graph above, total cost at the profit-maximizing output level equals
$4,800
In the graph above, price equals
$40
In the graph above, total revenue at the profit maximizing output level equals
$8,000
What is the total revenue from selling 7 units if the price is $210?
$840
At what quantity level(s) does the firm in Exhibit 0121 break even?
B and D
At the profit maximizing level of output
Marginal revenue = marginal cost.
A profit maximizing firm that is showing losses (negative profit) faces which of the following conditions?
P < ATC
The accountants hired by Davis Golf Course have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $145,000. Because of this information, in the short run, Davis Golf Course should
decide to stay open because shutting down would be more expensive
The demand curve in a perfectly competitive industry (market) is ________ while the demand curve to a single firm in that industry is _______
downsloping, perfectly elastic
Firms in perfect competition are price takers because
each firm is too small compared to the market to be able to affect price
At Paula's Pizza, the marginal revenue of the last pizza produced is $12. The marginal cost of the last pizza produced is $10. In order profits, Paula should:
increase output