Exam 9: Firms in Perfectly Competitive Markets

The supply curve of a perfectly competitive firm in the short run is

Both individual buyers and sellers in perfect competition

A perfectly competitive firm breaks even at a price equal to its minimum average total cost.

Which of the following is the best example of a perfectly competitive firm?

Why are individual buyers and sellers in perfect competition called price takers?

In the long run,perfectly competitive firms earn zero economic profit.Why do firms enter an industry when they know that in the long-run they will not earn any profit?

Firms in perfectly competitive industries are unable to control the prices of the products they sell and earn a profit in the long run.Which of the following is one reason for this?

Table 9-1 Quantity Total Cost (dollars) Variable Cost (dollars) 0 \ 1,000 \ 0 100 1,360 360 200 1,560 560 300 1,960 960 400 2,760 1,760 500 4,000 3,000 600 5,800 4,800 Table 9-1 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 9-1.If the market price of each camera case is $8,what is the profit-maximizing quantity according to the MR = MC rule?

Marty's Bird House suffers a short-run loss.Marty can reduce his loss below the amount of his total fixed costs by continuing to produce if his revenue

Which of the following is not true for a firm in perfect competition?

Figure 9-7 Figure 9-7 illustrates the cost curves of a perfectly competitive firm. -Refer to Figure 9-7.If the market price is P₂ the firm

A perfectly competitive firm's supply curve is its

Allocative efficiency is achieved in an industry when firms supply those goods and services that provide consumers with a marginal benefit equal to the marginal cost of producing those goods and services.

A teenaged babysitter is similar to a firm in a perfectly competitive industry in that,for both

Table 9-3 Quantity Total Cost Average Total Cost Marginal Cost 0 \ 10.00 \@cdots \@cdots 1 15.00 \ 15.00 \ 5.00 2 17.50 8.75 2.50 3 22.50 7.50 5.00 4 30.00 7.50 7.50 5 40.00 8.00 10.00 6 52.50 8.75 12.50 7 67.50 9.64 15.00 8 85.00 10.63 17.50 9 105.00 11.67 20.00 Arnie sells basketballs in a perfectly competitive market. Table 9-3 summarizes Arnie's output per day (Q), total cost (TC), average total cost (ATC) and marginal cost (MC). -Refer to Table 9-3.What price (P)will Arnie charge and how much profit will he earn if the market price of basketballs is $12.50?

Figure 9-17 The graphs in Figure 9-17 represent the perfectly competitive market demand and supply curves for the apple industry and demand and cost curves for a typical firm in the industry. -Refer to Figure 9-17.Which of the following statements is true?

Figure 9-1 -Refer to Figure 9-1.If the firm is producing 500 units

Assume that the tuna fishing industry is perfectly competitive.Which of the following best characterizes the industry if,as demand for tuna increases,fishing boats have to go farther into the ocean to harvest tuna?

The price of a seller's product in perfect competition is determined by

A perfectly competitive firm in a constant-cost industry produces 1,000 units of a good at a total cost of $50,000.The prevailing market price is $48.Assuming that this firm continues to produce in the long run,what happens to output level in the long run?