Exam 12: Firms in Perfectly Competitive Markets

Hogrocket, which developed the Tiny Invaders game for the iPhone, found that to maintain sales in a profitable competitive market, the price of a product

In the short run, if a firm shuts down it avoids its variable cost but not its fixed cost.

Figure 12-10 -Refer to Figure 12-10.Total revenue at the profit-maximizing level of output is

Competition has driven the economic profits in the video rental business to zero.Surya Bacha, who owns a video rental business, would be better off leaving the industry for another alternative.

After an increase in demand in a constant-cost industry, firms will find themselves with higher average cost curves.

Assume that the personal computer industry is perfectly competitive.The fact that the price of personal computers over the last decade has fallen despite increases in demand signifies that the industry is a decreasing-cost industry.

In a graph with output on the horizontal axis and total revenue on the vertical axis, what is the shape of the total revenue curve for a perfectly competitive seller?

If a perfectly competitive firm's price is less than its average total cost but greater than its average variable cost, the firm

Which of the following is not an assumption of perfectly competitive markets?

Assuming a market price of $4, fill in the columns in the following table.What is the profit-maximizing level of production? What are the two ways to determine the profit-maximizing level of production?

Table 12-4 Table 12-4 shows the short-run cost data of a perfectly competitive firm.Assume that output can only be increased in batches of 20 units. -Refer to Table 12-4.If the market price is $45, the firm

The minimum point on the average variable cost curve is called the loss-minimizing point.

Figure 12-4 Figure 12-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market. -Refer to Figure 12-4.If the market price is $30, should the firm represented in the diagram continue to stay in business?

Table 12-1 Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases.Assume that output can only be increased in batches of 100 units. -Refer to Table 12-1.If the market price of each camera case is $8, what is the profit-maximizing quantity?

Which of the following is not an option for a perfectly competitive firm that suffers short-run losses?

Figure 12-7 Figure 12-7 illustrates the cost curves of a perfectly competitive firm. -Refer to Figure 12-7.If the market price is P₃ the firm

Figure 12-9 Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly competitive firm. -Refer to Figure 12-9.Identify the short-run shut down point for the firm.

What is the difference between "shutting down temporarily" and "exiting the industry"?

Assume that price is greater than average variable cost.If a perfectly competitive seller is producing at an output where price is $11 and the marginal cost is $14.54, then to maximize profits the firm should

Table 12-1 Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases.Assume that output can only be increased in batches of 100 units. -Refer to Table 12-1.What is the fixed cost of production?