Exam 12: Perfect Competition

Use the figure below to answer the following questions. Figure 12.4.2 -Refer to Figure 12.4.2, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run, market

A perfectly competitive firm is maximizing profit if

Use the figure below to answer the following question. Figure 12.4.4 -Refer to Figure 12.4.4, which shows the cost curves for a perfectly competitive firm. If all firms in the market have the same cost curves and the price is $16 per unit,

Use the information below to answer the following questions. Fact 12.4.1 Franklin is a fiddlehead farmer. He sold 10 bags of fiddleheads last month, with total fixed cost of $100 and total variable cost of $50. -Refer to Fact 12.4.1. If the price of fiddleheads last month was $15 per bag, Franklin

Use the table below to answer the following questions. Table 12.2.2 -Refer to Table 12.2.2, which gives the total cost schedule for Chip's Pizza Palace, a perfectly competitive firm. If the price of a pizza is $7, what is Chip's profit-maximizing output per hour?

Use the figure below to answer the following question. Figure 12.3.2 -Refer to Figure 12.3.2, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry, The firm is

Use the table below to answer the following questions. Table 12.2.1 -Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm. If the firm produces 2 units of output, it

Use the figure below to answer the following questions. Figure 12.3.1 -Refer to Figure 12.3.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry. In the short run, if the market price of the good is $10, the firm produces ________ units of output and ________.

Firms will stop exiting a market only when

The shutdown point occurs at the point of minimum

If a firm faces a perfectly elastic demand for its product, then

Use the figure below to answer the following question. Figure 12.3.5 -Refer to Figure 12.3.5, which shows the cost curves and the marginal revenue curve for a perfectly competitive firm. To maximize its profit, the firm produces ________ units of output and the price is ________ a unit.

Technological change

Which one of the following does not occur in perfect competition?

If a perfectly competitive firm is producing an output at which price is equal to average total cost, the firm

Use the information below to answer the following questions. Fact 12.2.1 Chevy Volt Production Temporarily Shut Down GM will temporarily lay off 1,300 employees as the company stops production of the electric car, Chevy Volt, for five weeks. GM had hoped to sell 10,000 Volts last year, but ended up selling just 7,671. It plans to maintain inventory levels by adjusting production to match demand. Source: Politico, March 2, 2012 -Refer to Fact 12.2.1. GM will start producing the Chevy Volt again when price is greater than

Use the table below to answer the following question. Table 12.4.1 -Refer to Table 12.4.1. The top table shows the market demand schedule for paper. The market is perfectly competitive and there are 1,000 firms that produce paper. Each firm has the costs shown in the bottom table when it uses its least-cost plant. The market price in the long run is ________ a box and the equilibrium quantity produced in the long run is ________ boxes a week.

Use the information below to answer the following questions. Fact 12.4.2 Exxon Mobil Selling All Its Retail Gas Stations Exxon Mobil is not alone among Big Oil exiting the retail gas business, a market where profits have gotten tougher as crude oil prices have risen. Gas station owners say they're struggling to turn a profit because while wholesale gasoline prices have risen sharply, they've been unable to raise pump prices fast enough to keep pace. Source: Houston Chronicle, June 12, 2008 -Refer to Fact 12.4.2. Exxon Mobil is making ________ decision in the retail gasoline market. This decision maximizes Exxon Mobil's economic profit if ________.

Choose the statement that is incorrect.

Use the table below to answer the following questions. Table 12.2.3 -Refer to Table 12.2.3, which gives the total cost schedule for Brenda's Balloon Shop, a perfectly competitive firm. Brenda's total fixed cost is