Exam 14: Firms in Competitive Markets

Use a graph to demonstrate the circumstances that would prevail in a competitive market where firms are earning economic profits.Can this scenario be maintained in the long run? Carefully explain your answer.

Figure 14-4 The figure below depicts the cost structure of a firm in a competitive market. -Refer to Figure 14-4.Firms would be encouraged to enter this market for all prices that exceed

Table 14-5 -Refer to Table 14-5.This table provides information on a firm's output,marginal revenue,and marginal cost for a firm.If the firm is maximizing profit,how much profit is it earning?

Profit-maximizing firms enter a competitive market when,for existing firms in that market,

A firm in a competitive market will maximize profit when the level of production is such that marginal cost equals price.

Figure 14-2 The figure below depicts the cost structure of a profit-maximizing firm in a competitive market. -Refer to Figure 14-2.Which line segment best reflects the short-run supply curve for this firm?

In a perfectly competitive market,the horizontal sum of all the individual firms' supply curves is

Describe the difference between average revenue and marginal revenue.Why are both of these revenue measures important to a profit-maximizing firm?

When firms have an incentive to exit a competitive market,their exit will

In a long-run equilibrium,it is possible that some firms in a competitive market are making a positive economic profit.

In the long run,a competitive market with 1,000 identical firms will experience an equilibrium price equal to the minimum of each firm's average total cost.

If occupational safety laws were changed so that firms no longer had to take expensive steps to meet regulatory requirements,we would expect that

When firms in a competitive market have different costs,it is likely that

Carla's Candy Store is maximizing profits by producing 1,000 pounds of candy per day.If Carla's fixed costs unexpectedly increase and the market price remains constant,then the short run profit-maximizing level of output

The exit of existing firms from a competitive market will

At the profit-maximizing level of output,

Total profit for a firm is calculated as

If there is an increase in market demand in a perfectly competitive market,then in the short run

A competitive firm has been selling its output for $20 per unit and has been maximizing its profit,which is positive.Then,the price rises to $25 and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price.Once the firm has adjusted,which of the following statements is correct?

In the short-run,a firm's supply curve is equal to