chapter 14 micro

Which of the following is not a characteristic of a competitive market?

d. Firms generate small but positive economic profits in the long run.

In the short run, competitive firms will temporarily shut down production if the price falls below

P1

In the long run, some competitive firms will exit the market if the price is below

P2

In the long run, the competitive equilibrium is

P2, Q2

If the price is P4, a competitive firm will maximize profits if it produces

Q3

Which of the following markets would most closely satisfy the requirements for a competitive market?

a. gold bullion

long-run market supply curve

a. is more elastic than the short-run market supply curve.

In the long run, the competitive firm's supply curve is the

a. portion of the marginal-cost curve that lies above the average-total-cost curve.

If an input necessary for production is in limited supply so that an expansion of the industry raises costs for all existing firms in the market, then the long-run market supply curve for a good could be

a. upward sloping.

In long-run equilibrium in a competitive market, firms are operating at a. the minimum of their average-total-cost curves. b. the intersection of marginal cost and marginal revenue. c. their efficient scale. d. zero economic profit. e. all of the above.

all of the above

If the long-run market supply curve for a good is perfectly elastic, an increase in the demand for that good will, in the long run, cause

b. an increase in the number of firms in the market but no increase in the price of the good.

If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost, the firm could increase profits if it

b. increased production.

The competitive firm maximizes profit when it produces output up to the point where

b. marginal cost equals marginal revenue.

In the short run, the competitive firm's supply curve is the

b. portion of the marginal-cost curve that lies above the average-variable-cost curve.

In the long run, some firms will exit the market if the price of the good offered for sale is less than

c. average total cost.

If all firms in a market have identical cost structures and if inputs used in the production of the good in that market are readily available, then the long-run market supply curve for that good should be

c. perfectly elastic.

If the price is P4, the firm will earn profits equal to the area

d. (P4 − P3) × Q3.

If a competitive firm doubles its output, its total revenue

doubles

For a competitive firm, marginal revenue is

equal to the price of the good sold

A grocery store should close at night if the

variable costs of staying open are greater than the total revenue due to staying open