Exam 8: Perfect Competition

Assume that the following data is for a profit-maximizing manufacturer: -Refer to the above information to answer this question.If the total fixed costs were to increase by $50 and the price is $75 per unit,what are the profit maximizing output and the level of profits?

The following are different market structures: 1. Monopoly 2. Perfect Competitions 3. Monopolistic Competition 4. Undifferentiated Oligopoly 5. Differentiated Oligopoly -Refer to the above information to answer this question.What is the name of the market in which there are a few large sellers and the product is differentiated?

The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500. -Refer to the above information to answer this question.What is the shut-down price?

What will happen graphically if firms exit from a perfectly competitive industry?

What is the significance of MC = ATC for a perfectly competitive firm?

What is the formula for marginal revenue?

The following graph shows the costs for a perfectly competitive producer: -Refer to the above graph to answer this question.If the price of the product is P5,what is the profit-maximizing output?

The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run: 1.produce more 2.produce less. 3.shut down 4.cannot be determined from the information. -Refer to the information above to answer this question.If the firm's total variable costs exceed its total revenue,what should the firm do?

What long-run effect will a decrease in market demand have on a decreasing-cost industry?

You are given the following cost and revenue data for Parkin's Pickles,a perfectly competitive firm at it current output level. a)What is the amount of profit or a loss? b)Is the firm producing the optimal output? If not,should the firm produce more,less or not at all?

Delta Rail is considering adding an additional run on its Hope to Princeton commuter route.The total cost of the additional trip is estimated to be $3,000 of which $1,000 are variable costs.The anticipated extra revenues are $1,800.What should the company do?

The supply curve for a perfectly competitive firm is that portion of its marginal cost curve that lies above its average variable cost curve.Explain why?

The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500. -Refer to the above information to answer this question.If the price is $350,what is the optimal output and what is the profit or loss?

What is the term for the profit per unit produced;that is,the total profit divided by output?

What is shutdown price?

What is marginal revenue?

In microeconomics what does the term the short run mean?

Draw a demand curve,marginal revenue curve,marginal cost curve,average total cost curve,and an average variable cost curve for a perfectly competitive firm earning an economic profit.Shade in the area of economic profit.

The following graph shows the total variable costs and the total costs for a competitive producer: -Refer to the above graph to answer this question.What is the value of the shut-down- price?

The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run: 1.produce more 2.produce less. 3.shut down 4.cannot be determined from the information. -Refer to the information above to answer this question.If the price equals the firm's marginal cost,what should the firm do?