Exam 22: The Competitive Firm

Suppose a firm has an annual budget of $200,000 in wages and salaries,$75,000 in materials,$30,000 in new equipment,$20,000 in rented property,and $35,000 in interest costs on capital.The owner/manager does not choose to pay himself,but he could receive income of $90,000 by working elsewhere.The firm earns revenues of $360,000 per year.What are the annual explicit costs for the firm described above?

A competitive firm

Profit

Which of the following is the best explanation for why individuals own small businesses?

When a firm minimizes its losses in the short run,

The market structure for an industry can limit the amount of profit a firm can make.

In order to sell additional units of their products,competitive firms must

In the In the News article "The Lure of Catfish" production of catfish has skyrocketed in the United States from 16 million pounds in 1975 to an expected 340 million pounds in 1989.The business is growing among farmers in Alabama,Arkansas,and Louisiana.Which of the following is the motive that enticed many farmers to give up the production of row crops to produce catfish?

If a firm can change market prices by altering its output,then it

Greater-than-normal profit represents

A perfectly competitive firm has no market power.

Discuss the characteristics of a perfect competitive industry and which real-life industries come closest to this type of market structure.

When price exceeds average variable cost but not average total cost,the firm should,in the short run,

Suppose a firm has an annual budget of $200,000 in wages and salaries,$75,000 in materials,$30,000 in new equipment,$20,000 in rented property,and $35,000 in interest costs on capital.The owner/manager does not choose to pay himself,but he could receive income of $90,000 by working elsewhere.The firm earns revenues of $360,000 per year.To receive a normal profit,the firm described above would have to

If a perfectly competitive firm is producing at its profit-maximizing output in the short run and fixed costs decline,the firm should

The production decision is a long-run supply decision.

The investment decision is made in the short run.

Which of the following affects both the marginal and average total cost curves of a firm in the short run?

If Tesla is thinking about building a new factory,it is making a

Short-run supply determinants include