Exam 9: Perfect Competition

Use the table Costs for a Perfectly Competitive Firm I. What price would make this firm willing to produce five units? Explain. How much profit or loss would the firm make at that price and quantity? Show your work. ​ ​

A firm is a price _____ if it accepts the market price as a given.

The decision to shut down a firm depends on whether the market price allows the firm to cover its:

What is a key difference between a perfectly competitive market and a monopolistically competitive market?

The market price of plunckets is $10, and the market for plunckets is perfectly competitive. If a firm in this market is choosing its optimal quantity of 98 plunckets, which of the following is NOT correct?

Spangles are sold in a perfectly competitive market, and the market price of a spangle is $10. A firm in this market can produce 100 spangles at a cost of $4 each. What does this firm's demand curve look like?

Use the table Costs for Alina's Apple Pies. If Alina's Apple Pies operates in a perfectly competitive market and the market price for a pie is $18, what profit (or loss) will this firm earn? ​

Suppose that Pumice Motor Company has total revenue of $800,000, fixed costs of $200,000, and variable costs of $900,000. If Pumice Motor company is known to be in a perfectly competitive market, which of the following is true?

Suppose that Pumice Motor Company has total revenue of $800,000, fixed costs of $200,000, and variable costs of $600,000. If Pumice Motor company is known to be in a perfectly competitive market, which of the following is true?

What happens if price is less than average total cost in a perfectly competitive market?

Use the figure A Perfectly Competitive Market in the Short Run II. If the price in this market persists, what will happen in the long run? ​ Figure: A Perfectly Competitive Market in the Short Run II

What role does information play in the ability of firms in perfectly competitive markets to charge a price higher than the market price?

When perfectly competitive firms are in long-run equilibrium:

Which of the following statements about market structures is NOT true?

How many buyers are there in a perfectly competitive market?

What is the shape of the market demand curve for a perfectly competitive market? What is the shape of the individual firm's demand curve in a perfectly competitive market? Explain why they are different.

In the market for empanadas, there are many buyers and sellers. However, Malini's empanadas have a unique seasoning that people are willing to pay more for. What feature of perfect competition does this market violate?

In a perfectly competitive market, the market price is $2, and firms are producing 100 units. At a quantity of 100 units, average total cost is $4, and average variable cost is $3. In the short run, firms will:

A firm pays $500,000 per year on costs that it cannot alter in the short run. This year, it expects to produce 100 units, and it will pay $400,000 on the inputs to produce those 100 units. What is this firm's average variable cost?

Alpha, Inc. knows that its lowest average variable cost is $400 and its lowest average total cost is $1,000. What price would make Alpha, Inc. willing to produce in the short run but not in the long run?