Exam 12: Perfect Competition

-American restaurants receive their supply of baby back-ribs from American farms and from farms in Denmark. In the figures above, the first diagram shows the perfectly competitive market for baby back ribs in the United States. The second figure shows the situation at Premium Standard Farm in Kansas, one of the many U.S. farms supplying these ribs. Now assume that the United States imposes a ban on European meat in response to the foot-and-mouth disease that has infected livestock in Europe. (Which the United States did several years ago.) In particular, suppose that the U.S. ban decreases the supply by 40 tons a year. Using the first figure, show the impact of this ban on the baby back rib market. Using the second figure, show the impact on Premium Standard Farm in Kansas.

In the short run, a perfectly competitive firm

The market for maple syrup is perfectly competitive. Suppose that the market is in long-run equilibrium when the market demand for maple syrup increases. In the long run, firms will ________ the market and the market ________ will ________.

-Sue's Sea Shells by the Sea Shore is a perfectly competitive firm selling sea shells at the market price of $2 per dozen. Sue's Sea Shells by the Sea Shore has fixed costs of $40 per day and a variable cost schedule in the table above. Based on this information, we can expect the number of firms in the sea shell market to

In perfect competition, the price of the product is determined where the market

Perfect competition exists in a market if

-In the above figure, if the price is $10, a profit-maximizing perfectly competitive firm will

-In the above figure, if the price is P₁ and the firm produced Q₃, the firm's economic profit is ________ than if it produced Q₁ and ________ than if it produced Q₂.

Which of the following is NOT a characteristic of a perfectly competitive industry?

In the long run, perfectly competitive firms earn just enough revenue to

In the long-run, if firms in a perfectly competitive market are incurring persistent economic losses, some firms will

In the short run, a perfectly competitive firm will shut down if at the profit maximizing quantity the

-The figure above shows short-run cost curves for a perfectly competitive firm. If the price of the product is $8 and the firm does NOT shut down, the firm's output in the short run

-The table above shows output and costs of Evan's Subs, a typical perfectly competitive firm in a local market for sandwiches. Evan's fixed cost is $9 per hour. The current market price of a sandwich is $6. What is Evan's maximum short-run economic profit?

What is a perfectly competitive firm's short-run supply curve?

If firms in a competitive market are ________ then there is ________ for firms to ________ the industry.

There is a technological advance in a perfectly market. Which of the following statements is NOT true?

Suppose firms in a perfectly competitive market are incurring an economic loss. Over time

A perfectly competitive firm maximizes its profit by

-In the above figure, the firm will produce