Exam 6: Perfectly Competitive Supply

Refer to the accompanying graph. If this firm is a price taker and the price of each unit of output is $15, then at this firm's profit-maximizing level of output, it will earn a ________ of ________.  

Refer to the accompanying graph. If this firm is a price taker and the price of each unit of output is $15, then this firm should:

Which of the following best explains why you are more likely to see a poor person than a wealthy person picking up aluminum cans to sell?

Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.   This firm's fixed cost each day is:

Which of the following will cause a decrease in the supply of jeans?

A seller's supply curve shows the seller's:

The accompanying table describes the relationship between the number of workers hired by a call center each hour and the number of calls the call center can make each hour. The call center has only 1 telephone. The telephone costs the firm $5/hour (regardless of how many calls are made), and each worker is paid $10 per hour.   Average variable cost is minimized when output is approximately:

In general, perfectly competitive firms maximize their profit by producing the level of output at which:

When more firms enter an industry:

Refer to the accompanying figure. In this market, equilibrium price is ________ and equilibrium quantity is ________.

Even when a firm produces the level of output at which price equals marginal cost, it should shut down if its total revenue is less than its:

The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive. If mushrooms sell for $10 per bushel, and Moe chooses the profit-maximizing quantity, he will gather:

Refer to the accompanying graph. If this firm is a price taker, then when the price of each unit of output is $30, this firm's total cost at its profit-maximizing level of output is ________.

Refer to the accompanying graph. If this firm is a price taker and the price of each unit of output is $9, then this firm should:

A decrease in the price a firm receives for its output will lead the firm to:

Refer to the accompanying table. The law of diminishing marginal returns becomes evident after ________ units of output are produced.  

If a perfectly competitive firm produces an output level at which price is less than marginal costs, then the firm should:

Jenny sells lemonade in front of her house in the summer. Several other kids in Jenny's neighborhood also run lemonade stands in the summer. Suppose that the first week of summer, Jenny charged 25 cents for an 8-ounce cup of lemonade, her next-door neighbor Sam charged 50 cents for an 8-ounce cup of lemonade, and Alex across the street charged 15 cents for an 8-ounce cup of lemonade. Assuming the market for lemonade is perfectly competitive, what is most likely to happen?

A profit-maximizing perfectly competitive firm must decide:

The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive. Moe's short run supply curve is: