Exam 12: Perfect Competition and the Supply Curve

Zoe's Bakery operates in a perfectly competitive industry. When the market price of iced cupcakes is $5, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's marginal cost is _, and her short-run profits are _.

(Multiple Choice)

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Question 201

Use the following to answer questions: -(Table: Soybean Cost) Look at the table Soybean Cost. What is the shut-down price for this farmer?

(Multiple Choice)

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Question 202

If the long-run market supply curve for a perfectly competitive market is horizontal, then this industry exhibits _____ costs.

(Multiple Choice)

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Question 203

In the short run, for a perfectly competitive firm, the portion of the MC curve at or above the shut-down price is also its:

(Multiple Choice)

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Question 204

Use the following to answer questions: Figure: Game-Day Shirts -(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 $11, in the long run:

(Multiple Choice)

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Question 205

Wenqin is a farmer, and in the short run she produces 100 bushels of wheat. Her average total cost per bushel is $1.75, total revenue is $450, and total fixed costs are $100. Wenqin's:

(Multiple Choice)

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Question 206

Use the following to answer questions: -(Table: Total Cost for a Perfectly Competitive Firm) Look at the table Total Cost for a Perfectly Competitive Firm. The firm will produce at a profit in the short run if the price is at least:

(Multiple Choice)

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Question 207

Use the following to answer question: -(Table: Lilly's Apple Orchard) Look at the table Lilly's Apple Orchard. Lilly is the price-taking owner of an apple orchard. Her orchard has fixed costs of $30. If the price of a bushel of apples is $80, how many bushels will Lilly produce? Is this a long-run equilibrium? If not, what will be the price of a bushel of apples in the long run? Show your work.

(Essay)

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Question 208

The short-run industry supply curve is the sum of the marginal cost curves above average variable cost for all of the firms in the industry, assuming that the number of firms is constant.

(True/False)

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Question 209

If the price is consistently below the average variable cost, then in the short run a perfectly competitive firm should:

(Multiple Choice)

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Question 210

In perfect competition, the profit-maximizing level of output occurs where the:

(Multiple Choice)

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Question 211

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. The minimum point of the AVC curve is $5. Which of the following equations would describe upward-sloping portion of the industry supply curve for the industry, where Q is the market quantity and P is the market price?

(Multiple Choice)

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Question 212

Use the following to answer questions: Figure: The Marginal Decision Rule -(Figure: Marginal Decision Rule) Look at the figure The Marginal Decision Rule. Given the market price P₁, B is the _____ curve.

(Multiple Choice)

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Question 213

A market that is in long-run equilibrium must also be in short-run equilibrium.

(True/False)

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Question 214

When a firm produces at an output level at which MR = MC, it is operating at the _____ level.

(Multiple Choice)

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Question 215

Use the following to answer questions: -(Table: Total Cost and Output) Look at the table Total Cost and Output, which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. If the market price of a tub of ice cream is $50, how much is Sergei's profit at the profit-maximizing output?

(Multiple Choice)

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Question 216

A competitive firm operating in the short run is producing at the output level at which ATC is at a minimum. If ATC = $8 and MR = $9, to maximize profits (or minimize losses), this firm should:

(Multiple Choice)

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Question 217

A perfectly competitive firm's demand curve is perfectly elastic at the market-determined price.

(True/False)

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Question 218

Use the following to answer questions: -(Table: Variable Costs for Lawns) Look at the 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; that is, the variable cost of mowing 1 through 10 lawns is $100. 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 many lawns will Alex mow?

(Multiple Choice)

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Question 219

Perfectly competitive industries are characterized by:

(Multiple Choice)

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Question 220

Showing 201 - 220 of 355

Zoe's Bakery operates in a perfectly competitive industry. When the market price of iced cupcakes is $5, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's marginal cost is _, and her short-run profits are _.

Use the following to answer questions: -(Table: Soybean Cost) Look at the table Soybean Cost. What is the shut-down price for this farmer?

If the long-run market supply curve for a perfectly competitive market is horizontal, then this industry exhibits _____ costs.

In the short run, for a perfectly competitive firm, the portion of the MC curve at or above the shut-down price is also its:

Wenqin is a farmer, and in the short run she produces 100 bushels of wheat. Her average total cost per bushel is $1.75, total revenue is $450, and total fixed costs are $100. Wenqin's:

Use the following to answer questions: -(Table: Total Cost for a Perfectly Competitive Firm) Look at the table Total Cost for a Perfectly Competitive Firm. The firm will produce at a profit in the short run if the price is at least:

The short-run industry supply curve is the sum of the marginal cost curves above average variable cost for all of the firms in the industry, assuming that the number of firms is constant.

If the price is consistently below the average variable cost, then in the short run a perfectly competitive firm should:

In perfect competition, the profit-maximizing level of output occurs where the:

Use the following to answer questions: Figure: The Marginal Decision Rule -(Figure: Marginal Decision Rule) Look at the figure The Marginal Decision Rule. Given the market price P₁, B is the _____ curve.

A market that is in long-run equilibrium must also be in short-run equilibrium.

When a firm produces at an output level at which MR = MC, it is operating at the _____ level.

A competitive firm operating in the short run is producing at the output level at which ATC is at a minimum. If ATC = $8 and MR = $9, to maximize profits (or minimize losses), this firm should:

A perfectly competitive firm's demand curve is perfectly elastic at the market-determined price.

Perfectly competitive industries are characterized by:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Exam 12: Perfect Competition and the Supply Curve

Zoe's Bakery operates in a perfectly competitive industry. When the market price of iced cupcakes is $5, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's marginal cost is _____, and her short-run profits are _____.

Use the following to answer questions: -(Table: Soybean Cost) Look at the table Soybean Cost. What is the shut-down price for this farmer?

If the long-run market supply curve for a perfectly competitive market is horizontal, then this industry exhibits _____ costs.

In the short run, for a perfectly competitive firm, the portion of the MC curve at or above the shut-down price is also its:

Wenqin is a farmer, and in the short run she produces 100 bushels of wheat. Her average total cost per bushel is $1.75, total revenue is $450, and total fixed costs are $100. Wenqin's:

Use the following to answer questions: -(Table: Total Cost for a Perfectly Competitive Firm) Look at the table Total Cost for a Perfectly Competitive Firm. The firm will produce at a profit in the short run if the price is at least:

The short-run industry supply curve is the sum of the marginal cost curves above average variable cost for all of the firms in the industry, assuming that the number of firms is constant.

If the price is consistently below the average variable cost, then in the short run a perfectly competitive firm should:

In perfect competition, the profit-maximizing level of output occurs where the:

Use the following to answer questions: Figure: The Marginal Decision Rule -(Figure: Marginal Decision Rule) Look at the figure The Marginal Decision Rule. Given the market price P1, B is the _____ curve.

A market that is in long-run equilibrium must also be in short-run equilibrium.

When a firm produces at an output level at which MR = MC, it is operating at the _____ level.

A competitive firm operating in the short run is producing at the output level at which ATC is at a minimum. If ATC = $8 and MR = $9, to maximize profits (or minimize losses), this firm should:

A perfectly competitive firm's demand curve is perfectly elastic at the market-determined price.

Perfectly competitive industries are characterized by:

First Principles

Economic Models: Trade-Offs and Trade 25

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods Common Resources

The Economics of the Welfare

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Filters

Zoe's Bakery operates in a perfectly competitive industry. When the market price of iced cupcakes is $5, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's marginal cost is _, and her short-run profits are _.

Use the following to answer questions: Figure: The Marginal Decision Rule -(Figure: Marginal Decision Rule) Look at the figure The Marginal Decision Rule. Given the market price P₁, B is the _____ curve.