Exam 12: Perfect Competition

-The table above gives the total revenue and total cost for a perfectly competitive firm producing chocolate chip cookies. If the firm is producing 1 pound of cookies, to maximize its profit it will

Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's earns $12,000 in revenue from the sale of those donuts. Homer's has two costs. First he pays $16,000 in annual rental payments for its five-year lease on its store. Second Homer incurs an additional cost of $5,000 for ingredients. Homer's fixed cost is equal to

-Acme is a perfectly competitive firm. It has the cost schedules given in the above table and has a fixed cost of $12.00. The price of Acme's product is $4.00. What is Acme's most profitable amount of output? What is Acme's total economic profit or loss?

In the short run, a perfectly competitive firm

"Perfectly competitive firms have total control over the price they set for their product." Explain why the previous statement is correct or incorrect.

-The figure above shows the marginal revenue and costs of a perfectly competitive firm. The marginal cost of the last unit produced is

-In the above figure, by increasing its output from Q₁ to Q₂, the firm

In a perfectly competitive market, technological advances bring ________ economic profits for producers and ________ lower prices for consumers.

Why are perfectly competitive ranchers in Montana price takers?

The goal of a perfectly competitive firm is to maximize its

-Consider the perfectly competitive firm in the above figure. What will the firm choose to do in the short-run and why?

A firm will expand the amount of output it produces as long as its

-In the above figure, at a price of $4 per unit, a profit-maximizing perfectly competitive firm will

In perfect competition

-In the long-run equilibrium in a perfectly competitive market, the economic profit of the firms is

The smallest quantity of output at which long-run average cost is at a minimum is a firm's ________.

In the long run, a perfectly competitive firm makes zero economic profit. What incentive does the firm have to stay in business if it is making zero economic profit?

A perfectly competitive firm will have an economic profit of zero if, at its profit-maximizing output, its marginal revenue equals its

Fresno County, California is the largest agricultural producing county in the country and almonds are an important crop with more than 99,000 acres harvested. Each acre produces about a ton of almonds and sold at a price of $4300 a ton. The Sagardia Brothers grew 600 acres of almonds. What would happen if the Sagardia Brothers priced their almonds at $4500 a ton?

Perfectly competitive firms will sometimes operate even though they incur an economic loss in the short run.