Perfect Comp. Questions
True
A firm in perfect competition is a price taker.
Greater than average total cost.
A perfectly competitive firm definitely earns an economic profit in the short run if price is
False
A perfectly competitive firm earns an economic profit if price equals average total cost.
False
A perfectly competitive firm has an economic loss if price is less than the marginal cost.
Many other firms produce the same product
A perfectly competitive firm is a price taker because
Marginal Revenue = Marginal Cost
A perfectly competitive firm maximizes its profit by producing at the point where
False
A perfectly competitive firm's short run supply curve is its average total cost above minimum average variable cost.
True
A perfectly competitive market has many firms.
The same as its demand curve.
For a perfectly competitive corn grower in Nebraska, the marginal revenue curve is
Perfect Competition, Monopoly, Monopolistic Competition, & Oligopoly
Four Types of Market
Exit; Supply Curve shifts leftward
If firms in a perfectly competitive market have economic losses, then as time passes firms ___, and the market _____.
Continue to produce if the price exceeds the average variable cost.
If the market price is lower than a perfectly competitive firm's average total cost, the firm will
60 units.
If the market supply curve and market demand curve for a good intersect at 600,000 units and there are 10,000 identical firms in the market, then each firm is producing.
False
In a perfectly competitive industry, a firm's economic profit is equal to price minus marginal revenue multiplied by quantity.
Earn zero economic profit, so that its owners earn a normal profit.
In the long run, a firm in a perfectly competitive market will
True
In the long run, firms respond to an economic loss by exiting a perfectly competitive market.
Might make an economic profit, an economic loss, or zero economic profit
In the short run, a perfectly competitive firm
False
New technology shifts a firm's cost curves upward and the market supply curve leftward.
Marginal Cost Curve below the shutdown point
One part of a perfectly competitive trout farm's supply curve is its
False
Stan's U-Pick Blueberry Farm, a perfectly competitive firm, will shut down if its total revenue is less than its total cost.
Horizontal
The demand curve faced by a perfectly competitive firm is
True
The market supply curve in the short run shows the quantity supplied at each price by a fixed number of firms
False
When a perfectly competitive firm is maximizing its profit, the vertical difference between the firm's marginal revenue curve and its marginal cost curve is as large as possible.
True
When the price equals total average cost, the firm makes zero economic profit.