Exam 10: The Firm and the Industry under Perfect Competition

To own a taxicab in New York City, you must own a medallion.New York City regulates the number of official cabs by limiting the number of medallions.Explain why the New York cab industry is not competitive by reviewing the four conditions necessary for competition.NYC violates which one?

As long as TVC < TR, a firm will have a positive level of output in the short run.

Explain why taxes on pollutants reduce pollution while subsidies to firms cutting their pollutants actually increase pollution.

The short-run supply curve of the perfectly competitive industry is found by summing the

Which of the following is not a characteristic of perfect competition?

A market

The entry of new firms into an industry will very likely

If a firm shuts down in the short run, its losses are equal to

Zero economic profits for a perfectly competitive firm in the long run means

For a perfectly competitive firm, marginal revenue equals average revenue because the

Which of the following statements is not true in a perfectly competitive industry in long-run equilibrium?

Firms will continue to enter a perfectly competitive industry until

The entry of firms into a perfectly competitive industry causes the supply curve to

A firm operating at MC = MR must be making a profit.

At a perfectly competitive firm's short-run equilibrium level of output,

A perfectly competitive firm is a "price maker."

The demand curve for the perfectly competitive industry normally slopes downward, unlike the perfect competitive firm.Why?

In long-run equilibrium, a firm in perfect competition has no economic profit.

Of the following industries, which are perfectly competitive? Of those which are not, why do they not fit the model? a.local banking b.gasoline stations c.college-level educational institutions d.local radio and television e.local farmers' market

A firm in a perfectly competitive industry