Exam 14: Firms in Competitive Markets

Scenario 14-2 Assume a certain firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $20 and its average total cost equals $25. The firm sells its output for $30 per unit. -Refer to Scenario 14-2. To maximize its profit, the firm should

When some resources used in production are only available in limited quantities, it is likely that the long-run supply curve in a competitive market is

If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should

Table 14-12 Bill's Birdhouses -Refer to Table 14-12. What is the total revenue from selling 4 units?

The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which

A firm's incentive to compare marginal revenue and marginal cost is an application of the principle that rational people think at the margin.

Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: -Refer to Figure 14-1. The firm should shut down if the market price is

The long-run equilibrium in a competitive market characterized by firms with identical costs is generally characterized by firms operating at efficient scale.

In a competitive market, is the long-run supply curve typically more elastic than the short-run supply curve, or is it less elastic than the short-run supply curve?

Bill operates a boat rental business in a competitive industry. He owns 10 boats and pays $1,000 per month on the loan that he took out to buy them. He rents each boat for $200 per month. The variable cost for each boat rental is $50. In the off season, Bill should

A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will

Explain how a firm in a competitive market identifies the profit-maximizing level of production. When should the firm raise production, and when should the firm lower production?

A firm sells 100 units of output and its total revenue is $800. The firm's average revenue amounts to __________.

If marginal cost exceeds marginal revenue, the firm

If there is an increase in market demand in a perfectly competitive market, then in the short run prices will

The textile industry is composed of a large number of small firms. In recent years, these firms have suffered economic losses, and many sellers have left the industry. Economic theory suggests that these conditions will

Table 14-13 Diana's Dress Emporium -Refer to Table 14-13. What is the marginal cost of the 8th unit?

When profit-maximizing firms in competitive markets are earning profits,

Scenario 14-1 Assume a certain firm in a competitive market is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. -Refer to Scenario 14-1. At Q = 999, the firm's profits equal

A competitive firm is maximizing its profit by selling 150 units of output. The firm's marginal cost is $8 and its average total cost is $6. The firm's profit amounts to __________.