Econ Exam part 2

If a purely competitive firms shuts down in the short run:

it will realize a loss equal to its total fixed costs

In the short run the individual competitive firm's supply curve is that segment of the:

marginal cost curve lying above the average variable cost curve

A competitive firm in the short tun can determine the profit-maximizing output by equating:

marginal revenue and marginal cost

Agriculture most closely approximates what kind of competition?

pure competition

The lowest point on a purely competitive firm's short run supply curve corresponds to:

the minimum point on its AVC curve

The MR = MC rule applies

to firms in all types of industries

Firms seek to maximize:

total profit

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

total revenue and total cost are equal

A purely competitive firm's short run supply curve is

up-sloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve

A purely competitive producer will not

advertise its product

A perfectly elastic demand curve implies that the firm:

can sell as much output as it chooses at the existing price

Suppose you find that the price of your product is less than minimum AVC. You should:

close down because, by producing, your losses will exceed your total fixed cost s

Price is constant of given to the individual firm selling in a purely competitive market because:

each seller supplies a negligible fraction of total supply

What is not a characteristic of pure competition?

price strategies by firms