Exam 14: Firms in Competitive Markets

Scenario 14-1 Assume a certain firm is producing Q = 1,000 units of output.At Q = 1,000,the firm's marginal cost equals $15 and its average total cost equals $11.The firm sells its output for $12 per unit. -Refer to Scenario 14-1.At Q = 1,000,the firm's profits equal

The Wheeler Wheat Farm sells wheat to a grain broker in Seattle,Washington.Since the market for wheat is generally considered to be competitive,the Wheeler Farm does not

When a profit-maximizing firm is earning profits,those profits can be identified by

A competitive market is in long-run equilibrium.If demand decreases,we can be certain that price will

Figure 14-3 -Refer to Figure 14-3.When price rises from P3 to P4,the firm finds that

The firm will make the most profits if it produces the quantity of output at which

The long-run market supply curve in a competitive market will

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 total cost but greater than the firm's average variable cost.

Susan quit her job as a teacher,which paid her $36,000 per year,in order to start her own catering business.She spent $12,000 of her savings,which had been earning 10 percent interest per year,on equipment for her business.She also borrowed $12,000 from her bank at 10 percent interest,which she also spent on equipment.For the past several months she has spent $1,000 per month on ingredients and other variable costs.Also for the past several months she has taken in $3,500 in monthly revenue.

Figure 14-2 -Refer to Figure 14-2.If the market price is $10,what is the firm's short-run economic profit?

In a competitive market with identical firms,

For a firm operating in a perfectly competitive industry,marginal revenue and average revenue are equal.

When new firms enter a perfectly competitive market,

Figure 14-3 -Refer to Figure 14-3.When price falls from P3 to P1,the firm finds that it

Which of the following characteristics of competitive markets is necessary for firms to be price takers?

Which of the following statements best reflects a price-taking firm?

List and describe the characteristics of a perfectly competitive market.

Which of the following statements regarding a competitive market is not correct?

Table 14-6 John's Vineyard -Refer to Table 14-6.What is the total revenue from selling 7 units?

In the transition from the short run to the long run,the number of firms in a competitive industry is