Exam 12: Perfect Competition

Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's earns $12,000 in revenue from the sale of those donuts. Homer's has two costs. First he pays $16,000 in annual rental payments for its five-year lease on its store. Second Homer incurs an additional cost of $5,000 for ingredients. Homer's variable cost is equal to

-The figure above shows the costs for the typical grower in the perfectly competitive turnip market. Currently, the price of a ton of turnips is $1,200. The demand for turnips increases permanently. The turnip industry experiences neither external economies nor external diseconomies. In the long run, the price of a ton of turnips ________.

-The figure above shows a firm in a perfectly competitive market. If the firm does not shut down, the least amount of output that it will produce is

-Suppose the cost curves in the above figure apply to all firms in the market. If the initial price is P₁, firms are ________ and some firms will ________ the industry.

-The above table shows the per day total cost for Kiley's Baseball Glove Company. Each glove is priced at $50 and Kiley's Baseball Glove Company is a perfectly competitive firm. At which of the following amounts of output is the economic profit maximized for Kiley's Baseball Glove Company?

In the long run, perfectly competitive firms make zero economic profit. This result is due mainly to which of the following assumptions?

-Given the total cost and total revenue curves in the above figure, what are the output levels at which the perfect competitor will earn a positive economic profit?

The USDA maintains ethanol has an impact on food prices. "Higher ethanol production definitely and directly raises the price of corn," said USDA economist Ephraim Leibtag. In the short run in the corn market, what is true if the production of ethanol increases?

A perfectly competitive firm will operate and incur an economic loss in the short run if

-In the above figure, if the price is $16 per unit, a profit maximizing perfectly competitive firm will

In perfect competition,

-In the above figure, if the price is $8 per unit, how many units will a profit maximizing perfectly competitive firm produce?

A perfectly competitive firm shuts down if the price of its product is

In a perfectly competitive market, there are

-The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,200 for a ton of turnips, the firm is

-In the above figure, if the price is $12 per unit, how many units will a profit maximizing perfectly competitive firm produce?

-The figure above shows the marginal revenue and costs of a perfectly competitive firm. The firm's profit is maximized when the firm produces

-The figure above shows a perfectly competitive firm. To maximize its profit, the firm will produce ________ units of output and the price will be ________ for a unit.

-Acme is a perfectly competitive firm. It has the cost schedules given in the above table and has a fixed cost of $12.00. The price of Acme's product is $4.00. What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

-In the above table, the firm's total fixed cost of production is