Exam 8: Perfect Competition

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 all buyers and sellers have no control over the price?

What is the term for the extra revenue derived from the sale of one more unit?

Describe the three types of industries in terms of their long-run costs:

The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows: -Refer to the above information to answer this question.If the price of the product is $250,how many will the manufacturer produce and what will be its profit or loss?

What is the term for the level of output at which the sales revenue of the firm just covers the fixed and variable costs including normal profits?

All of the following except one are characteristics of perfect competition.Which is the exception?

Table 8.8 refers to a perfectly competitive firm. -Refer to Table 8.8 to answer this question.What is the value of the shutdown price?

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 $10,what is the profit-maximizing (or loss-minimizing)output?

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 loss.Shade in the area of the economic loss.

What is break-even output?

Answer the following questions with respect to falling prices: a)What will the firm in a perfect competitive industry do if the price of the product drops? b)When is a firm still profitable? c)When does the firm experience a loss? d)When should the firm shutdown?

Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar. -Refer to the information above to answer this question.What is the manufacturer's break-even price?

Which of the following statements is true regarding the price in a perfectly competitive market?

What are the four characteristics of an efficient market system?

All of the following except one are considered to be the prerequisite elements for a market system to work effectively.Which is the exception?

What action should a perfectly competitive firm take if,at its present output,MC is equal to price,MC is increasing and is less than the average variable cost?

In what situation will a firm incur a loss?

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 many sellers and the product is differentiated?

The following table shows the costs for a manufacturer: -Refer to the above information to answer this question.If the price of the product is $60,how much will the manufacturer produce and what will be its total profit or loss?

What is the significance of MC = AVC (assume Q > 1)for a perfectly competitive firm?