Perfect Competition - Smartbook

In a perfectly competitive market, assume the market price is $10 per unit, and the profit-maximizing quantity is 45 units. If the ATC at 45 units is $8, the profit/loss amount at the profit-maximizing quantity is $_.

$90 or 90

Use the table to answer the question. If the MR = $5.00, what is the profit-maximizing quantity and profit amount?

90 pounds, Profit = $81 Reason: To find the quantity, find the quantity where MR = MC. This is at a quantity of 90 pounds. To find profit, use the following formula (P − ATC)*Q = (5 − 4.10)(90) = $81.

_ competition is a market structure characterized by the interaction of large numbers of buyers and sellers in which the sellers produce a standardized or homogeneous product.

Perfect

Total revenue minus the implicit and explicit costs of production is _ profit.

economic

Total revenue minus the _ and _ costs of production is economic profit.

explicit; implicit

In perfect competition,:

firms cannot influence the market price with production decisions.

The long-run relationship between the price and the quantity supplied is given by the:

long-run supply curve.

A market structure characterized by the interaction of large numbers of buyers and sellers in which the sellers produce a standardized or homogeneous product is known as:

perfect competition.

Firms that take or accept the market price and have no ability to influence that price are known as:

price takers.

Total revenue equals:

price times quantity.

In the short run, as the price rises,:

quantity supplied rises.

Total _ equals price times quantity.

revenue

Profit equals (average _ minus average total _) multiplied by output.

revenue; cost

Profit equals total __ minus total __.

revenue; cost

For a firm, profit equals total _ minus total _.

revenue; cost or costs

In the _ (short/long) run, when at least one input is fixed, as the price rises so does the level of output supplied.

short

The long-run relationship between the price and the quantity supplied is given by the long-run _ curve.

supply

The long-run supply curve represents:

the long-run relationship between the price and the quantity supplied.

Profit equals ___ revenue minus ___ cost.

total; total