Exam 22: Aprice Takers and the Competitive Process

Suppose that price is below the minimum average total cost (ATC)but above the minimum average variable cost (AVC)and that the market price is expected to rise at least to ATC in the near future.In the short run,a firm that is a price taker would

Suppose the demand curve for aluminum cans is downward sloping,and the cans are produced in a constant cost industry where the firms are price takers.A $.25-per-can tax is levied on aluminum cans.How much will the price of aluminum cans increase in the short run and the long run?

When the marginal cost of a price-taker firm is more than the market price of its product,the firm should

Figure 9-1 -Figure 9-1 shows the marginal and average total cost curves for a firm producing product A.What would be the minimum price this firm could charge and still continue to supply A to the market in the long run?

Figure 9-7 -When the market price in Figure 9-7 is $4,the firm's maximum weekly profit will be approximately

A price-taker firm will tend to expand its output so long as its

Competitive price-taker firms respond to changing market conditions by varying their

You are the owner of an ice cream shop that earns a profit most of the year except during the cold winter months.During the month of December,your rent and other fixed costs amount to a total of $200.If you remain open,your total variable costs (workers,ice cream cones,etc. )will amount to $300.If you would be able to sell 100 ice cream cones at $4 each during December,then

If a firm in a price-taker market is earning zero economic profit,it

When new firms have an incentive to enter a competitive price-taker market,their entry will

Which of the following is a primary difference between price searchers and price takers?

Claude's Copper Clappers sells clappers for $40 each in a competitive price-taker market.At its present rate of output,Claude's marginal cost is $39,average variable cost is $25,and average total cost is $45.To improve his profit/loss situation,Claude should

A perfectly elastic,long-run market supply curve is most likely to be achieved in

The schedule of total costs for a chair-manufacturing firm is presented in the table below.If the market price of chairs is $100,which output should this price-taker firm produce to maximize profit?

The textile industry is composed of a large number of small firms.In recent years,these firms have suffered economic losses,and many sellers have left the industry.Economic theory suggests that if technology,imports,and other factors remain constant,these conditions will

Table 9-1 -Refer to Table 9-1.After the increase in the market price to $570,what is the maximum profit per month the Tuckers can earn?

Figure 9-18 -Refer to Figure 9-18.To maximize profit,the firm should produce an output level of

In the short run,a perfectly competitive firm will always shut down if total revenue is ____ at all positive output levels.

Figure 9-18 -Refer to Figure 9-18.At the profit-maximizing level of output,the firm will earn an economic (Hint: Areas in the exhibit are referenced by the four letters on the corners of the respective area. )

As the period for firms to expand output is lengthened,the elasticity of the market supply curve will