Exam 14: Firms in Competitive Markets

A firm operating in a perfectly competitive industry will shut down in the short run but earn losses if the market price is less than that firm's average variable cost.

A competitive firm has been selling its output for $20 per unit and has been maximizing its profit, which is positive. Then, the price falls to $18, and the firm makes whatever adjustments are necessary to maximize its profit at the now-lower price. Once the firm has adjusted, its

When an individual firm in a competitive market decreases its production, it is likely that the market price will rise.

When new firms enter a perfectly competitive market,

Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by the typical firm in this market?

For a firm operating in a perfectly competitive industry, total revenue, marginal revenue, and average revenue are all equal.

A competitive firm has been selling its output for $20 per unit and has been maximizing its profit, which is positive. Then, the price rises to $25, and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price. Once the firm has adjusted, its

The short-run supply curve in a competitive market must be more elastic than the long-run supply curve.

Figure 14-13 Suppose a firm in a competitive industry has the following cost curves: -Refer to Figure 14-13. If the price is $6 in the short run, what will happen in the long run?

A competitive firm sells 100 units of output for $5 per unit. The firm's marginal revenue amounts to __________.

In a market with a fixed number of firms, as long as price is above average

When a profit-maximizing firm in a competitive market has zero economic profit, accounting profit

The exit of existing firms from a competitive market will

In the long run the market supply

​Table 14-16 The table represents the demand information for a firm in a competitive market. ​ -Refer to Table 14-16. For this firm, when output is equal to 12 units, average revenue is

If some resources used in the production of a good are only available in limited quantities, then the long run market supply curve will be perfectly elastic.

In the short run, a firm should exit the industry if its marginal cost exceeds its marginal revenue.

Table 14-10 Suppose that a firm in a competitive market faces the following revenues and costs: -Refer to Table 14-10. This firm should continue to produce and sell units as long as the marginal cost of production is less than or equal to

When a profit-maximizing firm's fixed costs are considered sunk in the short run, then the firm

Table 14-9 Suppose that a firm in a competitive market faces the following revenues and costs: -Refer to Table 14-9. In order to maximize profit, the firm will produce a level of output where marginal cost is equal to