Exam 14: Firms in Competitive Markets

Table 14-2 The following table presents cost and revenue information for Soper's Port Vineyard. -Refer to Table 14-2.Consumers are willing to pay $120 per unit of port wine.What is the average revenue when 4 units are sold?

The long-run equilibrium in a competitive market characterized by firms with identical costs is generally characterized by firms operating at efficient scale.

The supply curve of a firm in a competitive market is the average variable cost curve,above the minimum of marginal cost.

Which of the following statements best reflects the production decision of a profit-maximizing firm in a competitive market when price falls below the minimum of average variable cost?

Suppose a competitive market has a horizontal long-run supply curve and is in long-run equilibrium.If demand decreases,we can be certain that in the short-run,

When a profit-maximizing firm is earning profits,those profits can be identified by

When new firms enter a perfectly competitive market,

Figure 14-5 The figure below depicts the cost structure of a firm in a competitive market. -Refer to Figure 14-5.When market price is P₁,a profit-maximizing firm's total revenue can be represented by the area

-If the figure in panel (a)reflects the long-run equilibrium of a profit-maximizing firm in a competitive market,the figure in panel (b)most likely reflects

In the long run the market supply

Mrs.Smith operates a business in a competitive market.The current market price is $8.50,and at her profit-maximizing level of production,the average variable cost is $8.00 and the average total cost is $8.25.

When profit-maximizing firms in competitive markets are earning profits,

When price is below average variable cost,a firm in a competitive market will

A distinctive feature of the average total cost curve is that it is upward sloping at every point.

When new entrants into a competitive market have higher costs than existing firms,

When economists refer to a production cost that has already been committed and cannot be recovered,they use the term

A miniature golf course is a good example of where fixed costs become relevant to the decision of when to open and when to close for the season.

Why would a firm in a perfectly competitive market always choose to set its price equal to the current market price? If a firm set its price below the current market price,what effect would this have on the market?

A certain competitive firm sells its output for $20 per unit.The 50th unit of output that the firm produces has a marginal cost of $22.Which of following is not necessarily true?

Raiman's Shoe Repair also produces custom-made shoes.When Mr.Raiman produces 12 pairs a week,the marginal cost of the twelfth pair is $84,and the MR of that unit is $70.What would you advise Mr.Raiman to do?