scheduled quiz, 14-16
joes car wash has average variable cost of 3$ and a fixed cost of 4$ when it produces 200 units of outputs (carwashes) the firms total cost is
1400
in the preceding graph, what profit would the firm earn if the price was 10$
15$
in the preceding figure, what is the level of profit firm operating in a monopoly environment at the profit maximizing level of production
280$
in the preceding figure, what would be the long run equilibrium price for this firm operating in a perfectly competitive envrionment
6$
in the preceding figure, how many units will the monopolists firm produce in order to maximize profit
70
in the preceding figure, what is the monopolists firms total cost at the profit maximizing level of production
700
which of the following firms is the closest to being a perfectly competitive firm
a grain farmer in Illinois
which of the following wold be most likely to have monopoly power
a local cable TV provider
monopolies are ineffiecient because the price they charge is
above marginal cost
which of the following expressions is correct?
accounting profit= economic profit+implicit costs
which of the following is not san example of a barrier to entry
an entrepreneur opens a popular new hair studio
for a firm operating in a competitive market, marginal revenue equals
average revenue and the price for all levels of output
profit maximizing firms enter a competitive market when existing firms in that market have
average total costs that are less than the market price
the fundamental source of a monopoly power is
barriers to entry
if a firm is operating in a perfectly competitive market, then which of the following is true
buyers and price makers and sellers are price takers
if a firm is operating in a monopoly market, which of the following is true
buyers and price takers and the sellers is a price maker
the following is true of implicit costs
can typically be thought of as opportunity cost
suppose that in a competitive market the equilibrium price is 2.50$. what is the marginal revenue for the last unit sold by the typical firm in this market
exactly 2.50
a competitive market is in long run equilibrium. if demand decreases, we can be certain that price will
fall in the short run. all, some, or no firms will shut down, and some of them will exit the industry. price will then rise to reach the new long-run equilibrium
in the long run
fixed variable cost becomes variable
competitive markets are characterized by
free and exit by firms
a firm that produces and sells furniture gets to choose
how many workers to hire in the short run and the long run
bubba is a shrimp fisherman who could earn 5,000 as a fishing tour guide. instead he is a full-time shrimp fisherman. in calculating the economic profit of his shrimp business, the 5000 that bubba gave up is counted as part of the shrimps business's
implicit cost
the difference between explicit and implicit costs is that
implicit costs do not require a direct monetary outlay by the firm, whereas explicit do.
a firm will shut down if the price of the firms product
is less that the average variable cost to produce the product
for a firm to price discriminate
it must have some market power
suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capitol). In the short run, the firm most likely considers
labor to be verified and capitol to be fixed
the profit maximizing firm will always produce the quantity where
marginal revenue equals marginal cost
the profit maximizing monopolist will produce at the point where
marginal revenue equals marginal cost
the ultimate goal of the firm is to
maximize profits
if the distribution of water is a natural monopoly then
multiple firms would likely each have to pay large fixed costs to develop their own network of pipes
in the preceding figure, if the market price fall below 12$, the firm will earn
negative economic profits and shut down
in the preceding figure, if the market price is between 12 and 26, the firm will earn
negative economic profits in the short run, but would remain in the business
in the preceding figure, if the market price rises 26$, the firm will earn
positive economic profits in the short run
the deadweight loss is associated with a monopoly occurs because the monopolist
produces an output level less than the socially optimal level
the intersection of a firms marginal revenue and marginal cost curves determine the level of output at which
profit is maximized
if there is an increase in market demand in a perfectly competitive market, then in the short run
profits will rise
marginal cost is defined by
the additional cost that is incurred as one more unit of output is produced
if a firm uses labor to produce output, the firms production function depicts the relationship between
the number of workers and the quantity of output
which of the following is an example of an implicit cost
the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm
the short run supply curve for a firm in a perfectly competitive market is
the portion of its marginal cost curve that lies above its average variable cost curve
bobs butcher shop is the only place within 250 miles that sells bison burgers. assuming that bob is a monopolist and maximizing his profit, which of the following statements is true
the price of bobs bison burgers will exceed bobs marginal cost
the competitive firms long run supply curve is that portion of the marginal cost curve that lies above average
total cost
average total cost is calculated as
total cost divided by an output
average variable cost is calculated as
total variable cost divided by output
in the preceding figure, if the market price is 26$, the firm will earn
zero economic profits in the short run
