Exam 9: Profit Maximization in Perfectly Competitive Markets

Use the following figure to answer the question : Figure 9-4 : 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. -Refer to Figure 9-4.The firm should shut down if the price falls to _____.

Which of the following is true of a constant cost industry?

If firms in a perfectly competitive market produced dissimilar products:

The short-run supply curve for a competitive industry is derived by summing the _____ for each firm in the industry.

The perfectly competitive firm minimizes losses by shutting down whenever:

In an increasing cost industry,as output increases:

Use the following figure to answer the question : Figure 9-4 : 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. -Refer to Figure 9-4.The total variable cost for the firm at output level OB is _____.

The presence of a relatively large number of firms in an industry does not ensure perfect competition if:

Use the following figure to answer the question : Figure 9-3 : 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. -Refer to Figure 9-3.At the output level OB,total profits equal the area given by _____.

If price remains above the average total cost for firms in a competitive industry:

The survivor principle in competitive markets implies that:

Suppose the total revenue (TR)and total cost (Tc.curves of a perfectly competitive firm are given by the following set of equations: TR = 100Q and TC = Q² + 4Q + 5,where Q is the output.Derive the firm's profit maximizing output and calculate the total and average profit earned by the firm at this level of output.

In the long run,if the input procurement prices increase as the output supplied by firms in an industry rises:

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

In the short-run,if a competitive firm finds itself operating at a loss,it will:

Use the following figure to answer the question : Figure 9-2 : shows the total cost and total revenue curves for a firm. -Refer to Figure 9-2.At which of the following output levels is the firm incurring its highest loss?

Use the following figure to answer the question : Figure 9-4 : 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. -Refer to Figure 9-4.Given that the market price is $P,the firm will be operating at a loss of _____.

The competitive firm is known as a price taker because:

During the 1970s,oil prices reached historical highs,causing many competitive industries to reduce the supply of goods and services.Which of the following is the most likely explanation for this reduction in supply?

Use the following figure to answer the question : Figure 9-3 : 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. -Refer to Figure 9-3.Assuming that price at 0R is $10,the profit maximizing level of output for the firm is _____.