Exam 9: Competitive Markets for Goods and Services

Use the following to answer question(s): Exhibit: Profit Maximizing -(Exhibit: Profit Maximizing) The exhibit shows cost curves for a firm operating in a perfectly competitive market. If the market price is P₄:

The supply curve for the firm in perfect competition:

Use the following to answer question(s): Exhibit: The Market for Carrots -(Exhibit: The Market for Carrots) If this is a perfectly competitive market, which of the following is true?

A firm's total output times the price at which it sells that output is:

Use the following to answer question(s): Exhibit: Total Revenue and Total Cost -(Exhibit: Total Revenue and Cost) Total revenue at the most profitable level of output is given by point:

Provided that there are no external benefits or costs, resources are efficiently allocated when:

In the long run, provided that there are no external benefits or costs, perfect competition will result in an efficient allocation of resources because:

A decrease in production costs for firms in a perfectly competitive market will cause a(n):

Charges that are paid for factors of production are called:

A perfectly competitive firm will earn a profit and will continue producing the profit-maximizing quantity of output in the short run if price is:

The competitive model assumes all of the following EXCEPT:

When economic profits in an industry are zero:

Economic profits in a perfectly competitive industry induce _______ , and losses induce _______ .

The shutdown point is P = minimum ATC.

Suppose that some firms in a perfectly competitive industry are incurring negative economic profits. In the long run, the:

Use the following to answer question(s): Exhibit: Perfectly Competitive Firm -(Exhibit: Perfectly Competitive Firm) The exhibit shows a perfectly competitive firm that faces demand curve d, has the cost curves shown, and maximizes profit. The firm's economic profit per period in the long run will be:

The primary application of the model of perfect competition is to:

Use the following to answer question(s): Exhibit: Total Revenue, Total Cost, and Economic Profit -(Exhibit: Total Revenue, Total Costs, and Economic Profit) The firm maximizes economic profit when the _______ of the total revenue and total cost curves are _______ and when _______ and ________ are equal.

Use the following to answer question(s): Exhibit: A Perfectly Competitive Firm in the Short Run -(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm's total economic profit at its most profitable level of output is:

Charges that must be paid for the use of factors of production such as labor and capital, together with estimated depreciation costs, are: