Exam 9: Profit Maximization in Perfectly Competitive Markets

The following figure shows the marginal cost curve,the average cost curve,the average variable cost curve,and the demand curve for a firm over different levels of output.The market price is $P. Figure 9-4 -Refer to Figure 9-4.The firm should shut down if the price falls to _____.

The assumptions of perfect competition _____.

The following figure shows the marginal cost curve,average total cost curve,average variable cost curve,and marginal revenue curve for a firm for different levels of output. Figure 9-3 -Refer to Figure 9-3.If the market price is $10,average revenue _____.

As long as there is free entry into a market:

Which of the following is true of the economic model of perfect competition?

In a constant-cost industry,the slope of the long-run supply curve is _____.

Assume a competitive industry produces widgets using labor and capital in fixed proportions.Both input supply curves slope upward.The government considers the equilibrium price of widgets to be too high and imposes a price ceiling that is below the equilibrium price.Which of the following is most likely to occur?

The following figure shows the marginal cost curve,the average cost curve,the average variable cost curve,and the demand curve for a firm over different levels of output.The market price is $P. Figure 9-4 -Refer to Figure 9-4.The total revenue for the firm at the output level OB is _____.

For a perfectly competitive firm,the demand curve:

The competitive firm maximizes its profit by operating at the point where _____ and price is greater than average variable cost.

The survivor principle in competitive markets implies that:

Which of the following is a condition for long-run equilibrium in a competitive industry?

The slope of the long-run supply curve in a decreasing-cost industry is _____.

The perfectly competitive firm minimizes losses by shutting down whenever:

Following a significant decrease in the price of a variable input,at the initial output level:

Figure 9-4 shows the marginal cost curve,average cost curve,average variable cost curve,and demand curve for a firm over different levels of output and at a market price of $P. Figure 9-4 -Refer to Figure 9-4.The firm's average fixed cost at the output level OB is _____.

The competitive firm's demand curve is:

ref SHAPE \* MERGEFORMAT The following figure shows the total cost and total revenue curves for a firm. Figure 9-2 -Refer to Figure 9-2.At which of the following levels of output is the firm maximizing profit?

According to the _____ principle,firms that do not approximate profit maximization will not succeed in competitive markets.

The following figure shows the marginal cost curve,average total cost curve,average variable cost curve,and marginal revenue curve for a firm for different levels of output. Figure 9-3 -In Figure 9-3,maximum profit per unit is equal to _____.