b

Refer to the graph for a firm that produces at the profit-maximizing level of output. What is the total profit made by the firm?

$40

Refer to the table above for a perfectly competitive firm selling cups. What is the marginal cost of increasing production from 1 to 2 cups?

$6

Refer to the graph for a firm that is producing at the profit maximizing level of output. How much profit is the firm making?

-$20

Refer to the graph shown. What is the profit maximizing level of output?

4 units

Refer to the graph shown that represents cost curves for a perfectly competitive firm. If the market price is $60, it will maximize profits by selling how many units?

8

Refer to the graph shown. This firm will do best producing

8 units because it is maximizing total profit.

Refer to the graph shown. What is the shutdown point of the firm?

B

The point above which the firm will be better off if it temporarily shuts down than if it stays in business is shown by which point on the graph?

B

True or false: Maximizing profit means maximizing profit per unit.

False

True or false: The market supply curve is obtained by vertical summation of the supply curves of all the firms in a perfectly competitive market.

False

The profit maximizing condition for a perfectly competitive firm is

MC = MR

Refer to the table above for a perfectly competitive firm selling handbags. What is the marginal cost of increasing production from 4 to 5 handbags?

Reason: Marginal cost = 30 - 25 = $5

True or false: If you know marginal revenue and marginal cost for the last unit produced, you can calculate total profit.

f

If firms are making an economic loss in a perfectly competitive industry

firms incurring economic losses will leave the industry.

A market in which economic forces operate unimpeded is called a perfectly

competitive

Refer to the graph shown. This profit-maximizing firm is currently producing at point C. It should

continue producing its current output.

In the long run, perfectly competitive firms

earn zero economic profit.

Refer to the graph shown. A perfectly competitive firm that maximizes profit as shown here is

earning no profit.

In a perfectly competitive market,

economic forces operate unimpeded.

Perfectly competitive firms cannot earn economic profit in the long run because

equilibrium price will fall as new firms enter the market until economic profits are zero.

The demand curve facing a perfectly competitive firm is

horizontal

The market supply curve is obtained by Blank 1Blank 1 Quantities , Incorrect Unavailable summation of the supply curves of all the firms in a perfectly competitive market.

horizontal

Refer to the graph shown. A perfectly competitive firm that maximizes profit as shown here is

incurring a loss shown by area A.

In the long run, perfectly competitive firms earn zero economic profit due to

lack of barriers to entry and exit of firms.

The supply curve of a perfectly competitive firm is the segment of the

marginal cost curve that lies above the average variable cost curve.

For a perfect competitor, the market price determines the firm's

marginal revenue curve

The marginal revenue for a perfect competitor is the

market price

The goal of the perfectly competitive firm is to ______.

maximize profits

If firms are making an economic profit in a perfectly competitive industry

new firms will enter the industry.

The demand curve facing a perfectly competitive firm is ____.

perfectly elastic

The goal of a firm is to maximize

profits

If firms are making an economic loss in a perfectly competitive industry, the market supply curve will eventually

shift to the left.

If firms are making an economic profit in a perfectly competitive industry, the market supply curve will eventually

shift to the right.

The marginal cost curve of a perfectly competitive firm is also its

supply curve

Total profit equals

total revenue less total cost.

True or false: The profit maximizing condition of a firm is MC = MR.

true