ECON HW 13
Quantity sold . Price 5 $15 6 $15 7 $15 In the above table, if the quantity sold by the firm rises from 5 to 6, its marginal revenue is
$15
Quantity . TFC . TVC 8 500 800 9 500 1000 10 500 1250 The table shows some of the costs for a perfectly competitive firm. The firm will produce 9 units of output if the price per unit is
$200
In the figure, the firm's total economic profit is equal to
$60
Quantity sold . Price 5 $15 6 $15 7 $15 In the above table, if the firm sells 5 units of output, its total revenue is
$75
Consider the perfectly competitive firm in the figure. The profit maximizing level of output for the firm is equal to
17 units.
A firm that shuts down and produces no output incurs a loss equal to its
total fixed costs.
Tammy sells woolen hats in a perfectly competitive market. The marginal cost of producing 1 hat is $24. The marginal cost of producing a second hat is $26 and the marginal cost of producing a third hat is $28. The market price of a hat is $26. To maximize profit, Tammy produces ________ a day.
2 hats
In the figure, the firm will produce
20 units.
The shortminus−run supply curve for a perfectly competitive firm is its marginal cost curve above the minimum point on the
average variable cost curve.
In the figure, the line represented by the "2" is the
average variable cost.
A perfectly competitive firm's shortminus−run supply curve is the same as its
MC curve above the minimum of the AVC curve.
Which of the following is always true for a perfectly competitive firm?
P = MR
The owners will shut down a perfectly competitive firm if the price of its good falls below its minimum
average variable cost.
In perfect competition, the market demand for the good ________ perfectly elastic and the demand for the output of one firm ________ perfectly elastic.
is not; is
The section of the marginal cost curve that lies above the average variable cost curve is
a perfectly competitive firm's supply curve.
In perfect competition, each individual firm faces ________ demand curve.
a perfectly elastic
The shortminus−run supply curve for a perfectly competitive firm is its marginal cost curve
above its shutdown point.
Perfect competition implies that
all firms are producing the same identical product. all firms are price takers. there are many firms in the industry.
In perfect competition,
all firms in the market sell their product at the same price.
Consider the perfectly competitive firm in the figure. At the profit maximizing level of output, the firm is earning
an economic loss equal to $119.00.
An example of a perfectly competitive firm is
an oat farmer in the United States.
A perfectly competitive firm maximizes its profit by
choosing to produce the quantity that sets MC equal to MR.
In perfect competition, an individual firm
determines the quantity it sells in the marketplace but has no influence over its price.
If the price exceeds the average variable cost, by producing the level of output such that marginal revenue equals marginal cost, the firm ensures that it will
earn the largest profit possible.
A perfectly competitive industry is characterized by
easy entry into the industry.
In perfect competition, the marginal revenue of an individual firm
equals the price of the product.
The costs incurred even when no output is produced are called
fixed costs.
In perfect competition, each firm ________.
is a price taker
In perfect competition, the firm's marginal revenue curve
is the same as its demand curve.
A perfectly competitive firm shuts down if the price of its product is
less than its minimum average variable cost.
In the figure, the line represented by the "4" is the
marginal cost.
The firm's supply curve is its
marginal cost curve, at all points above the minimum average variable cost curve.
A perfectly competitive firm's economic profit is maximized by producing the amount of output such that
marginal revenue equals marginal cost.
In the figure, the line represented by the "1" is the
marginal revenue.
A perfectly competitive firm maximizes its economic profit if it produces so that
marginal revenue = marginal cost.
A perfectly competitive firm will shut down rather than produce if its
price is less than average variable cost.
If the price of its product falls below the minimum point on the AVC curve, the best a perfectly competitive firm can do is to
shut down and incur an economic loss equal to its total fixed cost.
Consider the perfectly competitive firm in the figure. What will the firm choose to do in the shortminus−run and why?
stay in business because the firm's economic loss is less than fixed costs
In perfect competition, the price of the product is determined where the market
supply curve and market demand curve intersect.
Marginal revenue is defined as
the change in total revenue that results from a one
A perfectly competitive firm will operate and incur an economic loss in the short run if
the loss is smaller than its total fixed costs.
An example of a perfectly competitive industry is
the market for corn in the United States.
In perfect competition, ________.
there are many firms that sell identical products
Firms in perfectly competitive industries have a ________ individual demand curve when the price is on the vertical axis and the quantity is on the horizontal axis. The shape of the curve is result of the firm being a ________.
horizontal; price taker