Econ Chap 10 Hw
In the long run,:
firms earn a normal profit.
The short-run supply curve starts at the minimum average ___ cost.
variable
Suppose Carl's Candies sells 100 boxes of candy for $4 each. The total fixed cost of the 100 boxes is $100 and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a total profit of:
$150.
Use the table to answer the following question. Assuming the market is perfectly competitive, what is the marginal revenue between 4 and 6 pounds of kale?
$2
Assuming the market for office paper is perfectly competitive, the profit level for the firm in the long run would be $ ___.
0
How many tomatoes will the farmer produce in the market above to maximize profits?
100 pounds
In a perfectly competitive market, assume the market price is $10 per unit, and the profit-maximizing quantity is 45 units. If the ATC at 45 units is $8, the profit/loss amount at the profit-maximizing quantity is $ ___.
90
Use the table to answer the following question. Which of the following is true about the market for kale if we assume the market is perfectly competitive?
MR = AR = Firm Demand
The extra or additional cost associated with the production of an additional unit of output is the ___ cost.
Marginal
A firm sustains a loss if:
TR < TC.
Which of the following markets would most closely resemble a perfectly competitive market?
Wheat Cucumbers Chlorine
Because the marginal revenue faced by the firm is equal to price, ___ revenue is also equal to price.
average
Marginal revenue is the:
additional revenue associated with the sale of an additional unit of output.
Perfect ___ is a market structure characterized by the interaction of large numbers of buyers and sellers in which the sellers produce a standardized or homogeneous product.
competition
In a perfectly competitive market, we assume the product is identical in the minds of ___.
consumers
As the market price decreases, all else held constant, a profit-maximizing firm can ___ (increase/decrease) its production.
decrease
The ___, the average revenue, and the marginal revenue curves for a perfectly competitive firm are the same horizontal line at the market price.
demand
When the total revenue ___ is than the total cost, the level of profit that occurs is a loss.
less
Because perfectly competitive firms are price takers, the marginal revenue is equal to the market ___.
price
All firms maximize ___ by producing the quantity of output at which the marginal revenue is equal to the marginal cost.
profit
Assuming the market for office paper is perfectly competitive, what would the long-run market price and output level be in the office paper market?
$30; 60 cases
Assuming the market for apples is perfectly competitive, what market price would result in a normal profit?
$4
Use the table to answer the question. If the market for apples is perfectly competitive, what market price would result in a normal (zero) profit?
$8.00
In a perfectly competitive market, the price the firm should charge is the market price because the firm is a price ___.
taker
If the market price is below the average variable cost, the business is not bringing in enough revenue to compensate for the ___ costs.
variable
Normal profit is also known as ___ economic profit.
zero
If the market above is perfectly competitive and the MR = $2, the profit/loss amount at the profit-maximizing quantity is ___.
-120
Use the table to answer the question. If the MR = $5.00, what is the profit-maximizing quantity and profit amount?
90 pounds, Profit = $81
In the presence of ___ profits, firms enter until the market reaches the point at which the firms are generating a(n) ___ profit; then entry stops and the market settles into its ___-run equilibrium.
Blank 1: economic or positive Blank 2: normal Blank 3: long
In the presence of ___ profits, firms enter until the market reaches the point at which the firms are generating a(n) profit ___; then entry stops and the market settles into its ___-run equilibrium
Blank 1: economic or positive Blank 2: normal Blank 3: long
Total revenue minus the ___ and ___ costs of production is economic profit.
Blank 1: explicit Blank 2: implicit
In the presence of ___, firms exit until the market reaches the point at which the firms are generating a ___ profit; then exit stops and the market settles down into its ___-run equilibrium.
Blank 1: losses Blank 2: normal Blank 3: long
In the presence of ___, firms exit until the market reaches the point at which the firms are generating ___a profit; then exit stops and the market settles down into its ___-run equilibrium.
Blank 1: losses or loss Blank 2: normal Blank 3: long
In the short run, the ___ supply curve for a firm is the ___ cost curve above or equal to the average cost curve.
Blank 1: marginal Blank 2: variable
Because the marginal revenue equals the market price for perfectly competitive firms, they should produce output until the market ___ equals the marginal ___.
Blank 1: price Blank 2: cost
All firms maximize profits by producing the quantity of output at which the marginal ___ is equal to the marginal ___.
Blank 1: revenue Blank 2: cost
Profit equals (average ___ minus average total ___) multiplied by output.
Blank 1: revenue Blank 2: cost
___ competition is a market structure characterized by the interaction of large numbers of buyers and sellers in which the sellers produce a standardized or homogeneous product.
Perfect
Which of the following is not a characteristic of perfect competition?
Producers who are price makers
Total revenue minus the implicit and explicit costs of production is ___ profit.
economic
Profit maximization implies that perfectly competitive firms should expand production up to the point where marginal revenue ___ (equals/exceeds) marginal cost.
equals
In a perfectly competitive market, a single firm is a price taker and therefore can only charge the ___ price.
equilibrium
The decision to shut down temporarily is a short-run decision, while the decision to ___ an industry can be made only in the long run.
exit
n the presence of economic losses, firms ___ (enter/exit) a perfectly competitive market until firms start earning normal profits.
exit
The marginal cost is the:
extra or additional cost associated with the production of an additional unit of output.
When a firm shuts down in the short run, it must still pay the ___ costs.
fixed
The market condition in which firms do not face incentives to enter or exit the market and firms earn a normal profit is known as ___-run equilibrium.
long
The market condition in which firms do not face incentives to enter or exit the market and firms earn a normal profit is known as:
long-run equilibrium.
If the market price is below the average variable cost, the firm is:
losing money in the short run and should shut down.
Because the ___ revenue faced by the firm is equal to price, average revenue is also constant and equal to price.
marginal
Extra or additional revenue associated with the production of an additional unit of output is the:
marginal revenue.
Profit ___ (maximization/minimization) implies that perfectly competitive firms should expand production up to the point where marginal revenue equals marginal cost.
maximization
A market structure characterized by the interaction of large numbers of buyers and sellers in which the sellers produce a standardized or homogeneous product is known as:
perfect competition.
Firms that take or accept the market price and have no ability to influence that price are ___ takers.
price
Firms that take or accept the market price and have no ability to influence that price are known as ___ takers.
price
In the short run, as the ___ rises so does the level of output supplied.
price
The demand for a perfectly competitive firm's product is a horizontal line originating at the market ___.
price
Total revenue equals:
price times quantity.
In the short run, as the price rises,:
quantity supplied rises.
Total ___ equals price times quantity.
revenue
Profit equals total ___ minus total ___.
revenue; cost
In the ___ (short/long) run, when at least one input is fixed, as the price rises so does the level of output supplied.
short
When it shuts down temporarily in the short run, a perfectly competitive firm
still incurs its total fixed costs.
As more firms enter the industry, ___ the curve will shift rightward.
supply
As more firms enter the industry, the ___ curve will shift rightward.
supply
Firms that take or accept the market price and have no ability to influence that price are known as price ___.
taker
Because perfectly competitive firms are price ___, the marginal revenue is equal to the market price.
takers
When the total revenue earned by a firm is less than the total cost of production,:
the firm faces a loss.
Changes in the variable costs of resources will affect:
the marginal costs faced by firms.
The firm's short-run supply curve is a(n) ___-sloping curve that begins at ___ average variable cost.
upward; minimum
In a perfectly competitive market, assume the market price is $5 per unit and the profit-maximizing quantity is 70 units. If the ATC at 70 units is $8, what is the profit/loss amount at the profit-maximizing quantity?
−$210
Suppose Carl's Candies sells 100 boxes of candy for $5 each. The total fixed cost of the 100 boxes is $100 and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a profit per unit of:
$2.50.
Suppose Carl's Candies sells 100 boxes of candy for $5 each. The total fixed cost of the 100 boxes is $100 and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a total profit of:
$250
When the total revenue is ___ than the total cost, the level of profit that occurs is a loss.
less
At the shutdown point, the price is ___ the average variable cost.
less than
The demand, the ___ revenue, and the revenue ___ curves for a perfectly competitive firm are the same horizontal line at the market price.
Blank 1: average Blank 2: marginal
___ profit creates an incentive for other perfectly competitive firms to enter the market.
Economic
Which of the following markets would most closely resemble a perfectly competitive market?
Tomatoes
Average revenue is the:
amount of revenue per unit of a product sold.
The total revenue divided by the number of units of a product sold is the ___ revenue.
average
In a perfectly competitive market, we assume the product is ___ (homogeneous/heterogeneous) in the minds of consumers.
homogeneous
In a perfectly competitive market, we assume the product is ___ in the minds of consumers. (Choose between heterogeneous orhomogeneous.)
homogeneous
The demand for a perfectly competitive firm's product is a(n) ___ line originating at the market price.
horizontal
In a perfectly competitive market, we assume the products are ___ in the minds of consumers.
identical
As the market price ___ (increases/decreases), all else held constant, a profit-maximizing firm can afford to expand its production.
increases