Exam 9: Profit Maximization in Perfectly Competitive Markets

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. -In Figure 9-3,maximum profit per unit is equal to _____.

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's average variable cost at the output level OB is _____.

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's average fixed cost at the output level OB is _____.

In a perfectly competitive market,if the product price remains unchanged,a fall in the price of an input used by a firm will:

Use the following figure to answer the question : Figure 9-1 : shows the total cost and total revenue for a firm when it prices its products at $8 and $10. -Refer to Figure 9-1.When the firm is producing the profit-maximizing level of output at a price of $10:

The short-run supply curve for a perfectly competitive industry is:

Answer the following: a)Jack's lawn-mowing service is a profit-maximizing,perfectly competitive firm.Jack mows lawns for $27 each.His total cost each day is $280,of which $30 is total fixed cost.He mows 10 lawns a day.Will Jack exit the industry in the short-run? Why or why not? b)Will Jack exit the industry in the long-run? Why or why not?

Consider a perfectly competitive firm facing the following conditions: TR = 150Q and TC = 500 + 3Q + Q².What is the firm's marginal revenue when Q = 50?

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 levels of output is the firm maximizing profit?

Which of the following correctly explains the effect of a price ceiling in a market?

A perfectly competitive firm faces a horizontal demand curve,which implies that:

The perfectly competitive firm maximizes profits by producing at the rate of output where:

The assumptions of perfect competition _____.

Profits are maximized at the output level where:

If market price is below a competitive firm's average total cost,the firm should:

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 revenue for the firm at the output level OB is _____.

Given below are the input supply curves for the housing and pencil industries,respectively.Graphically illustrate the long-run supply curve for the two industries and comment on the nature of the housing and pencil industries.

Fair trade coffee is a movement designed to increase the price coffee growers in developing countries receive for their output.Retailers such as supermarkets and coffee shops charge their customers extra for either brewed coffee or coffee beans,promising to remit the additional charge to coffee growers in developing countries. a)Assuming entry costs for growing coffee are sufficiently low,which presumably they are,explain why the fair trade coffee program is not likely to benefit the growers,notwithstanding coffee retailers' promises to do so. b)Who would you predict benefits most from the fair trade subsidy that seeks to improve the living standards of coffee growers?

Derive the first-order and second-order conditions for perfect competition.

Suppose a constant-cost competitive industry produces widgets using labor and capital in fixed proportions.A firm in the industry faces: