micro exam 3

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the lowest point on a purely competitive firm's short-run supply curve corresponds to

the minimum point on its AVC curve

resources are efficiently allocated when production occurs at that output at which

P=MC

which of the following industries most closely approximates pure competition

agriculture

which of the following conditions is not required for price discrimination?

buyers with different elasticities must be physically separate from eachother

the process by which new firms and new products replace existing dominant firms and products is called

creative destruction

price is taken to be a "given" by an individual firm selling in a purely competitive market because

each seller supplies a negligible fraction of the total market

under a pure monopoly, a profit-maximizing firm will produce

in the elastic range of its demand curve

"Big Data"

is used by firms to price discriminate through personal pricing

if a price-discriminating monopolist sells the same product in two markets but charges a higher price in market X and a lower price in market Y, the pricing difference indicates that the demand is

less elastic in market X than in market Y

in the short-run equilibrium, a monopolist's profits

may be positive, negative, or zero

if total revenue falls as output expands, marginal revenue is

negative

if a purely competitive firm is producing at the MR=MC output level and earning an economic profit, then

new firms will enter this market

a firm is producing an output such that the benefit from one or more unit is more than the cost of producing that additional unit. this means the firm is

producing less output than allocative efficiency requires

suppose that the corn market is purely competitive. if the corn farmers are currently earning negative economic profits, then we would expect that in the long run the market's

supply curve will shift to the left

which of the following does not necessarily apply to a pure monopoly?

the firm will charge the highest price possible

under what conditions would an increase in demand lead to a lower long-run equilibrium price?

the firms in the market are part of a decreasing-cost industry

one defining characteristic of a pure monopoly is that

the monopolist produces a product with no close substitutes

suppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. now assume that an increase in consumer demand occurs. after all resulting adjustments have been completed, the new equilibrium price will be

the same as the initial equilibrium price, but the new industry output will be greater than the original output

a firm reaches a break-even point (normal profit position) where

total revenue and total cost are equal

if a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue

will also be $5

assume a purely competitive constant-cost industry is initially at long-run equilibrium. now suppose that a decrease in demand occurs. after all the long-run adjustments have been completed, the new equilibrium price

will be the same as the initial price, and the output will be less

a pure monopolist

will recognize an economic profit if price exceeds ATC at the profit-maximizing/loss-minimizing level of output

creative destruction is least beneficial to

worker in the "destroyed" industries


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