Exam 12: Perfect Competition and the Supply Curve

Use the following to answer question: -(Table: Variable Costs for Lawns)Use Table: Variable Costs for Lawns.During the summer,Alex runs a lawn-mowing service,and lawn-mowing is a perfectly competitive industry.Assume that costs are constant in each interval;so,for example,the marginal cost of mowing each of the lawns from 1 through 10 is $10.Also assume that he can only mow the quantities of lawn given in the table (and not numbers in between).His only fixed cost is $1,000 for the mower.His variable costs include fuel,his time,and mower parts.If the price for mowing a lawn is $40,how much is Alex's total revenue at the profit-maximizing output?

Use the following to answer question: -(Figure: The Profit-Maximizing Firm in the Short Run)Use Figure: The Profit-Maximizing Firm in the Short Run.If the market price is P₃,the firm will produce quantity _____ and _____ in the short run.

Use the following to answer question: -(Figure: Game-Day Shirts)Use Figure: Game-Day Shirts.Rick is one of 10 vendors who sell game-day T-shirts at football games in a perfectly competitive market.His costs are identical to the costs of the other 9 vendors.If the price of a shirt is $14,the short-run industry supply will be _____ shirts.

Use the following to answer question: -(Table: Total Cost for a Perfectly Competitive Firm)Use Table: Total Cost for a Perfectly Competitive Firm.If the market price is $4.50,profit at the profit-maximizing quantity of output is:

A perfectly competitive firm will earn a profit in the short run when it produces the profit-maximizing quantity of output and the price is:

If the price is greater than the average variable cost and less than the average total cost at the profit-maximizing quantity of output in the short run,a perfectly competitive firm will:

Use the following to answer question: -(Table: Variable Costs for Lots)Use Table: Variable Costs for Lots.During the winter,Alexa runs a snow-clearing service in a perfectly competitive industry.Assume that costs are constant in each interval;so,for example,the marginal cost of clearing each of the lots from 1 through 10 is $20.Also assume that she can only plow the quantities of the lots given in the table (and not numbers in between).Her only fixed cost is $1,000 for a snowplow.Her variable costs include fuel,her time,and hot coffee.If the price to clear a lot is $60,what is Alexa's profit per unit at the optimal output?

A perfectly competitive firm's marginal cost curve above the average variable cost curve is its _____ curve.

Suppose that the market for candy canes operates under conditions of perfect competition,that it is initially in long-run equilibrium,that the price of each candy cane is $0.10,and that the market demand curve is downward sloping.The price of sugar rises,increasing the marginal and average total costs of producing candy canes by $0.05.In the short run,a typical producer of candy canes will be making:

A perfectly competitive industry is said to be efficient because the:

Use the following to answer question: -(Table: Variable Costs for Lawns)Use Table: Variable Costs for Lawns.During the summer,Alex runs a lawn-mowing service,and lawn-mowing is a perfectly competitive industry.Assume that costs are constant in each interval;so,for example,the marginal cost of mowing each of the lawns from 1 through 10 is $10.Also assume that he can only mow the quantities of lawn given in the table (and not numbers in between).His only fixed cost is $1,000 for the mower.His variable costs include fuel,his time,and mower parts.If the price for mowing a lawn is $70,how much is Alex's profit per unit at the profit-maximizing output?

Use the following to answer question: -(Figure: The Profit-Maximizing Firm in the Short Run)Use Figure: The Profit-Maximizing Firm in the Short Run.The ATC curve is represented by:

In the long run,when there are economic losses,firms leave the industry,which will decrease the market supply and increase the price until economic losses are zero.

Which statement is NOT characteristic of perfect competition?

Suppose economic profits exist in perfect competition in the short run.Firms will enter in the long run because of easy entry,the short-run market _____ curve will shift to the right,and _____ will _____.

Use the following to answer question: -(Figure: Total Revenue and Total Cost)Use Figure: Total Revenue and Total Cost.The MOST profitable level of output occurs at quantity:

Use the following to answer question: -(Figure: Revenues,Costs,and Profits for Tomato Producers III)Use Figure: Revenues,Costs,and Profits for Tomato Producers III.The market for tomatoes is perfectly competitive.If the market price of a bushel of tomatoes is $18,this farm will:

The shut-down point in the short run is the:

Use the following to answer question: -(Figure: Marginal Decision Rule)Use Figure: The Marginal Decision Rule.To the left of point C (e.g. ,at q₁):

A perfectly competitive industry has 10 firms,each with an MC curve that can be expressed as MC = 5q,where q is the level of output for each firm.Which equation would describe the industry supply curve,where Q is the market quantity and P is the market price?