Exam 14: Firms in Competitive Markets

Shrimp Galore,a shrimp harvesting business in British Columbia,has a 30-year loan on its shrimp harvesting boat.The annual loan payment is $25,000 and the boat has a market (salvage) value that exceeds its outstanding loan balance.Prior to the 2015 shrimp harvesting season,Shrimp Galore's accountant predicted that at expected market prices for shrimp,Shrimp Galore would have a net loss of $55,000 after paying all 2015 expenses (including the annual loan payment).In this case,what should Shrimp Galore do

What is a characteristic of a competitive market

A firm's incentive to compare marginal revenue and marginal cost is an application of the principle that rational people think at the margin.

In the long run,when will a profit-maximizing firm choose to exit a market

Market demand is given as Q_D = 75 - 2P.Market supply is given as Q_S = 2P + 15.Each identical firm has MC = 3Q and ATC = 2Q.What quantity of output will a typical firm produce

Table 14-3 -Refer to Table 14-3.What is the maximum profit available to this firm

Table 14-7 The widget industry has three types of firms. The cost structure for each type is as follows: -Refer to Table 14-7.If this is a competitive market and it is in long-run equilibrium,what must the price be if all three types of firms are producing

When a profit-maximizing firm's fixed costs are considered sunk in the short run,what are the firm's options

A firm will shut down in the short run if the total revenue that it would get from producing and selling its output is less than which of its costs

Starting from a situation in which a firm in a competitive market produces and sells 5000 doorknobs for a price of $20 per doorknob,which event would decrease the firm's average revenue

Market demand is given as Q_D = 220 - 3P.Market supply is given as Q_S = 3P + 40.Each identical firm has MC = 0.3Q and ATC = 0.2Q.What is a firm's profit

Firms in competitive markets are said to be price takers.

Market demand is given as Q_D = 300 - 5P.Market supply is given as Q_S = 5P.Each identical firm has MC = 6Q and ATC = 4Q.What is a firm's average total cost

A profit-maximizing firm in a competitive market is able to sell its product for $8.At its current level of output the firm's average total cost is $11.Its marginal-cost curve crosses the marginal revenue curve at an output level of 10 units.At that point,what does the firm experience

Table 14-2 -Refer to Table 14-2.At which quantity of output is marginal revenue equal to marginal cost

Figure 14-3 -Refer to Figure 14-3.If the firm is in a short-run position where P < AVC,what segment of the supply curve is it most likely to be on

What happens if a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost

In calculating accounting profit,what do accountants typically exclude

In a particular market,there are 500 firms.Each firm has a marginal cost of $40 when it produces 200 units of output.What is one point on the market supply curve

Market demand is given as Q_D = 120 - 2P.Market supply is given as Q_S = 2P.Each identical firm has MC = 6Q and ATC = 3Q.What is a firm's average total cost