Exam 8: Competitive Firms and Markets

Suppose that for each firm in the competitive market for potatoes,long-run average cost is minimized at $0.20 per pound when 500 pounds are grown.The demand for potatoes is Q = 10,000/p.If the long-run supply curve is horizontal,then how many pounds of potatoes will be consumed in total?

If firms in a competitive market are not identical,then an increase in cost will

In deciding whether to operate in the short run,the firm must be concerned with the relationship between price of the output and

The deadweight loss associated with output less than the competitive level can be determined by

If all conditions for a perfectly competitive market are met

In a perfectly competitive market with 100 identical firms producing at market price p₁

Total surplus

What is one reason activists might lobby the government to force firms to produce more output than they normally would in a perfectly competitive market?

The competitive firm's supply curve is equal to

Long-run market supply curves are downward sloping if

There are currently N identical firms in a market.If it is a perfectly competitive market,the short-run market supply curve at any given price is

Suppose there are 1000 identical wheat farmers.For each,TC = 10 + q².Market demand is Q = 600,000 - 100p.Derive the short-run equilibrium Q,q,and p.Does the typical firm earn a short-run profit?

Assume a consumer has a horizontal demand curve for a product.His consumer surplus from buying the product

In the absence of any government regulation on price,if a firm has no power to set price on its own,one can safely conclude

A firm will enter a competitive market when

If firms in a competitive market are identical,then the long-run market supply curve will be

A consumer's marginal willingness to pay

In the short run

In the long run,profits will equal zero in a competitive market because of

Consumer surplus