Exam 14: Firms in Competitive Markets

Explain how a firm in a competitive market identifies the profit-maximizing level of production.When should the firm raise production,and when should the firm lower production?

Suppose a firm in a competitive market received $1,000 in total revenue and had a marginal revenue of $10 for the last unit produced and sold.What is the average revenue per unit,and how many units were sold?

When some resources used in production are only available in limited quantities,it is likely that the long-run supply curve in a competitive market is

A competitive firm's short-run supply curve is part of which of the following curves?

Scenario 14-2 Assume a certain firm is producing Q = 1,000 units of output.At Q = 1,000,the firm's marginal cost equals $20 and its average total cost equals $25.The firm sells its output for $30 per unit. -Refer to Scenario 14-2.At Q = 1,000,the firm's profits equal

Table 14-1 -Refer to Table 14-1.For a firm operating in a competitive market,the average revenue is

A firm is currently producing 100 units of output per day.The manager reports to the owner that producing the 100th unit costs the firm $5.The firm can sell the 100th unit for $5.The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses).

Joe's Garage operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $20,AVC = $15,and the price per unit is $10.In this situation,

In calculating accounting profit,accountants typically don't include

Table 14-6 John's Vineyard -Refer to Table 14-6.What is John's Vineyard's economic profit at its profit-maximizing output level?

If ABC Company sells its product in a competitive market,then

Figure 14-5 -Refer to Figure 14-5.Firms will be encouraged to enter this market for all prices that exceed

In a market with 1,000 identical firms,the short-run market supply is the

Figure 14-11 -Refer to Figure 14-11.If the figure in panel (a)reflects the long-run equilibrium of a profit-maximizing firm in a competitive market,the figure in panel (b)most likely reflects

Suppose you bought a ticket to a football game for $30 and that you place a $35 value on seeing the game.If you lose the ticket,then what is the maximum price you should pay for another ticket?

A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average variable cost.

When firms in a competitive market have different costs,it is likely that

Suppose a firm is considering producing zero units of output.We call this shutting down in the short run and exiting an industry in the long run.

A profit-maximizing firm in a competitive market will earn zero accounting profits in the long run.

In a long-run equilibrium where firms have identical costs,it is possible that some firms in a competitive market are making a positive economic profit.