Exam 12: Perfect Competition

-The donut market is perfectly competitive. The figure shows the costs of a typical donut producer. In the short run, the donut producer's supply curve is the curve running from point ________ to point E.

The costs incurred even when no output is produced are called

The firm's short run supply curve is equal to the

When do new firms enter a perfectly competitive market? When does entry stop?

A firm will expand the amount of output it produces as long as its

-Consider the perfectly competitive firm in the above figure. The profit maximizing level of output for the firm is equal to

The shutdown point occurs at the level of output for which the ________ is at its minimum.

-In the above figure, the firm's total economic profit is equal to

If the price exceeds the average variable cost, by producing the level of output such that marginal revenue equals marginal cost, the firm ensures that it will

Perfect competition arises if the ________ efficient scale of a single producer is ________ relative to the demand for the good or service.

-Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 4 cents per page, what is Fast Copy's economic profit?

The price elasticity of demand for any particular perfectly competitive firm's output is

The market for lawn services is perfectly competitive. Larry's Lawn Service cannot increase its total revenue by raising its price because

How does a decrease in the demand for wheat ultimately lead to normal profits for wheat growers in the long run?

In the long run, a perfectly competitive firm can make an economic profit because its marginal cost equals its average total cost.

Pumpkin growing is a perfectly competitive industry. Suppose that pumpkin growers are all incurring an economic loss. What happens as time passes? What is the long-run equilibrium outcome?

Marginal revenue is defined as

If a perfectly competitive firm decides to shut down in the short run, its loss will equal its

-The above diagram shows the cost curves for a perfectly competitive wheat farmer. At what price does the wheat farmer shut down?

-In the above figure, the line represented by the "4" is the