Exam 10: The Firm and the Industry Under Perfect Competition

If the typical firm's minimum average variable cost is $10 at an output of 50 units, if marginal cost is $20 at 70 units, and there are 1,000 firms in the industry, sketch supply curves for the typical firm and for the industry as a whole.

An increase in market demand will cause an increase in industry output in the long run because

In a long-run equilibrium in a perfectly competitive market, firms are selling at a price equal to marginal cost.

A perfectly competitive firm will always maximize profits by producing where

If the price falls below minimum SRAVC, the quantity supplied by the firm will be

In long-run equilibrium under perfect competition,

Which of the following observations is not true?

If a firm sells its output at a price greater than AC, it will earn economic profit.

Perfect competition is an ideal market structure.

Figure 10-2 -Figure 10-2 shows demand and short-run cost curves for a perfectly competitive firm.At its profit-maximizing output, the firm's total ____ is represented by area ____.

Under perfect competition, regarding short-run profit, a firm may find itself losing money.This is true because: ​

A firm in short-run equilibrium always earns positive profits if

A market

Perfect competition requires that three conditions be satisfied.

A firm will shut down in the short run if

Under perfect competition, a firm's:

Explain why taxes on pollutants reduce pollution while subsidies to firms cutting their pollutants actually increase pollution.

What happens to the price of the product and total revenue for a perfectly competitive firm if it doubles the amount of output it supplies in the market?

To determine whether a market is perfectly competitive, economists examine the

In the short-run, the lowest price that a perfectly competitive firm will accept without closing its doors is found by examining the average variable cost curve.