Exam 12: Perfect Competition

-Based on the table above which shows Chip's costs, if Chip shuts down in the short run, his economic loss will be

-Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price is $15, the firm will

New reports indicate that eating turnips helps people remain healthy. The news shifts the demand curve for turnips rightward. In response, new farms enter the turnip industry. During the period in which the new farms are entering, the price of a turnip ________ and the economic profit of each existing firm ________.

Pumpkin growing is a perfectly competitive industry. Suppose that pumpkin growers are all incurring an economic loss. What happens as time passes? What is the long-run equilibrium outcome?

A firm's shutdown point is the output and price at which the firm just covers its

-The above diagram shows the cost curves for a perfectly competitive wheat farmer. At what price(s) does the wheat farmer make an economic profit? Make zero economic profit? Incur an economic loss? How many bushels of wheat does the farmer produce if the price is $3 per bushel? If the price is $0.50 per bushel?

The short-run market supply curve is

Marginal revenue is defined as

-If the market for maple syrup is perfectly competitive, then in the long-run equilibrium, firms are

-John keeps beehives and sells 100 quarts of honey per month. The honey market is perfectly competitive, and the price of a quart of honey is $10. John has an average variable cost of $5 and an average fixed cost of $3. At 100 quarts per month, John's marginal cost is $10. a) Is John maximizing his profit? If not, what should John do? b) Calculate John's total revenue, total cost, and total economic profit or economic loss when he produces 100 quarts of honey.

-The feature of the above figure that indicates that the firm is a perfectly competitive firm is the

Does a perfectly competitive producer have any incentive to undercut the current market price? Explain your answer

In the long run, a perfectly competitive firm can make an economic profit because its marginal cost equals its average total cost.

If the market price is less than a perfectly competitive firm's average total cost, what sort of profit or loss is the firm making?

A perfectly competitive firm maximizes its profit by producing the output at which its marginal cost equals its

"Higher ethanol production definitely and directly raises the price of corn," said USDA economist Ephraim Leibtag. In the long run in the corn market, what is TRUE if the production of ethanol increases?

The market for fish is perfectly competitive. So, the price elasticity of demand for fish from a single fishing boat

"A perfectly competitive firm will shut down if the price falls below its average total cost." Do you agree? Explain.

A perfectly competitive firm's short-run supply curve is the same as its

Suppose firms in a perfectly competitive industry are making economic profits. As a result I. new firms enter the industry. II) the market price falls. III) the economic profits of the existing firms decrease.