Exam 9: A: Price Takers and the Competitive Process

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

If marginal revenue exceeds marginal cost at the current level of output, profit will increase when output is expanded because

If profit-seeking entrepreneurs are going to be successful, they must

Competitive price-taker markets are characterized by

If a restaurant in a summer tourist area is highly profitable during the summer months but unable to cover even its variable costs during the winter months, the restaurant should

Which of the following best describes the series of events shown in the figure? The original conditions prior to the change are shown by D₀ and S₀ (point A), and SLR is the market long-run supply curve.

In the short run, a firm that is a price taker will stay in business as long as

Figure 9-6 -When the market price in Figure 9-6 is $20, the firm's maximum profit will be approximately

If firms in a price-taker industry were forced to install antipollution devices that increased their production costs, we should expect

Scenario 9-1 Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. -Refer to Scenario 9-1. At Q = 1,000, the firm's profit amounts to

If factor prices rise as demand increases and the firms expand output, the long-run market supply curve will be upward sloping. In terms of economics, this describes

In a price-taker market, economic losses indicate that

The entry of new firms into a competitive market will

If a price taker in a competitive market is going to maximize profits, he must

Which of the following is a residual reward that accrues to business decision makers who use resources so as to increase their value?

If the ice cream industry is a competitive price-taker market and all ice cream producers are earning zero economic profit, what will be the impact of an increase in the demand for ice cream?

When a firm in a price-taker industry is in long-run equilibrium, the market price equals

The dynamic process of competition

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

Figure 9-17 -Which of the following statements about the competitive price-taker firm represented in Figure 9-17 is false?