ECON FINAL

economic profits in a perfectly competitive industry encourage firms to ___ the industry, and losses encourage firms to ___ the industry

- enter and exit

In the shorten , a perfectly competitive firm produces output and earns zero economic profit if,

P = ATC

For the monopolistically competitive wild- caught seafood market, the demand curve for any individual firm is ____ , and there are ___ producers of seafood

downward sloping ; many

Da Beers became a monopoly by

establishing control over diamond mines

a perfectly competitive firm will incur an economic loss but will continue to produce the profit-maximizing quantity of output in the short run if the price is

greater than average variable cost and less than average total cost

price takers are individuals in a market who

have no ability to affect price of a good in a market

in perfect competition the assumption of easy entry and exit implies

in the long run all firm in the industry will earn zero economic profits

suppose that you build a hit speed magnetically powered transportation system from NY to LA. High fixed costs resulting from the enormous quantity of capital used in this system enable decreasing average cost for any conceivable level of demand your monopoly would result from

increasing returns to scale

a monopolist responds to an increase in demand by ____price and ____ output

increasing; increasing

For a perfectly competitive firm, marginal revenue

is equal to price

If it produces, a perfectly competitive firm will maximize profits when the

marginal revenue = marginal costs

the ability of a monopolist to raise the price of a product able the competitive level by reducing the output is known as

market power

because of the existence of a large # of similar but not identical substitutes in most communities the market for financial planners is best considered to be

monopolistically competitive

If the price is greater than average total cost at the profit- maximizing quantity of output, in the short run, a perfectly competitive firm will

produce at a profit

In a perfectly competitive industry, each firm

produces a standardized product

For a perfectly competitive firm, the short run supply curve is the

rising part of the marginal cost curve beginning at the shut down point

If a florida strawberry wholesaler operates in a perfectly competitive market, that wholesaler will have a ______ share of the market, and consumers will consider her strawberry to be _______. Therefore ______ advertising will take place in this market

small; standardized; little if any

perfect competition

the inability of any one firm to influence price

suppose that a monopoly computer chip maker increases production from 10 microchips to 11 microchips. If the market prices declines from 30 per unit to 29 per unit marginal revenue for the eleventh unit is

19

wendy has a monopoly in the retailing of motorhomes. she can sell five per week at$21,000 each.If she wants to sell six, she can only charge 20,000 each. The price effect of selling the sixth motorhome is

5,000

If your farm had the only known source of a rare cocoa bean needed to make chocolate covered peanuts, your monopoly would result from

control of a scarce resource or input