Micro 14-16
mary is the only vetinarian in a small town. to maximize her profit, mary will choose to treat--animals per hour and charge --per customer in order to
4; $50; maximize profit
Diseconomics of scale is a result of
Difficulties of coordinating and controlling a large enterprise.
Which of the following statements is true?
In the long run, all costs are variable costs.
The change in cost that results from a one-unit increase in output is called the
Marginal cost
the return to entrepreneuership is known as
Normal profit
if a firm is able to convert every dollar of cunsumer surplus to economic profit, the firm has achieved
Perfect Price Discrimination
Because the amount of labor a firm employs can be changed, the cost of labor is known as
Variable
total cost is equal to the sum of
Variable and fixed
a natural monopoly exists when
When a single firm can supply a product to an entire market at a smaller cost than could two or more firms
a major characteristic of monopoly is
a single seller of a product
if we compare a perfectly competitive market to a single price monopoloy with the same costs, the monopoly sells
a smaller quantity at a higher price
The long run is a time period in which
all firm resources are variable
Increasing marginal returns to labor
are the result of specialization and division of labor in the production process.
The long-run average cost curve traces out the lowest possible _______ of producing each output.
average total cost
In the long run, perfectly competitive firms produce at the output level that has the minimum
average total cost.
The output at which average product is a maximum is the same output at which ______ is a minimum.
average variable cost
the theory that regulation helps producers to maximize profit is the
capture theory
When firms in a perfectly competitive market incur economic losses, exit by some firms means the market supply will
decrease.
For the perfectly competitive broccoli producers in California, the market demand curve for broccoli is
downward sloping.
when a firm is regulated so it uses an average cost pricing rule, the price
equals average total cost
The cost that a firm pays in money to hire a resource is referred to as a
explicit
If a firm shuts down, it
incurs an economic loss equal to its total fixed cost.
with perfect price discrimination, the level of output
is the same as the amount produced in a perfectly competitive market
A monopoly can price discriminate only if
it sells goods and services that cannot be resold
A perfectly competitive firm's short-run supply curve is
its marginal cost curve above the AVC curve.
Constant returns to scale are features of a firm's technology that _______.
keep average total cost constant as output increases
If a perfectly competitive firm's average total cost is less than the price, then the firm
makes an economic profit.
A firm maximizes its profit by producing the amount of output such that
marginal revenue equals marginal cost.
The firm's over-riding objective is to
maximize economic profit.
the primary goal of a business firm is to
maximize profit
What is the difference between perfect competition and monopolistic competition?
n perfect competition, firms produce identical goods, while in monopolistic competition, firms produce slightly different goods.
When firms in a perfectly competitive market are earning an economic profit, in the long run
new firms will enter the market.
If the wheat industry is perfectly competitive with a market price of $4 per bushel and Farmer Brown charged $5 per bushel, how many bushels would Farmer Brown sell?
none
a marginal cost pricing rule sets marginal cost equal to
price
a buy one get one for half price promotion is an example of
price discriminating among units of a good.
why do publishers print the first edition of a book by a popular author in hard cover and not in paperback
readers who want to read the book are willing to pay higher price
if a monopoly wants to sell a larger quantity, it must
set a lower price
a single price monopoly
sets a single price for all consumers
If Judy experiences diseconomies of scale, her long-run average cost curve ______.
slopes upward
In economics, the short run is the time frame in which the quantities of ______ and the long run is the period of time in which ______.
some resources are fixed; the quantities of all resources can be varied
which of the following is a fixed cost for ACME manufaturing
the annual fire and theft insurance premiums
which of the following is a list of fixed inputs for a hospital
the emergency room, intensive care unit, and other facilities
Normal profit is
the return to entrepreneurship.
if a single price monopoly is earning a large economic profit, what keeps otherfirms from competing away the price
there are barriers to entry
Average product is equal to
total product divided by quantity of labor
patents
what increases the incentive to innovate
To maximize its profit, in the short run a perfectly competitive firm decides
what quantity of output to produce.
In the long run, a perfectly competitive firm earns
zero economic profit.
Perfect competition ________ an efficient outcome because ________.
achieves; total surplus is maximized, achieves; marginal benefit equals marginal cost