micro exam 3
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
