Exam 10: Perfect Competition

The table given below shows the price of each unit of the product manufactured by a firm and the marginal cost of producing different units of the output.Table: 10.1 -According to the information in Table 10.1, this firm will maximize profit when total output is equal to _____ units.

Scenario 9.2 Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments. -A perfectly competitive firm maximizes profit when:

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.5 MC: Marginal cost curve MR: Marginal revenue curve.ATC: Average-total-cost curve AVC: Average-variable-cost curve -Which of the following statements is true in the context of the long run?

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7 -When the marginal costs of firms in perfect competition increases, the short-run supply curve of the industry will shift to the left.

The table given below shows the price of each unit of the product manufactured by a firm and the marginal cost of producing different units of the output.Table: 10.1 -According to the information in Table 10.1, the marginal revenue of the firm:

Scenario 9.2 Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments. -If a firm in a perfectly competitive market raises its price:

Scenario 9.2 Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments. -The model of perfect competition best applies to markets with:

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7 -At long-run equilibrium of a perfectly competitive firm the following condition holds good: Long Run Average-Total-Cost = Long Run Marginal Cost = Average Revenue = Marginal Revenue = Price.

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.1 -If in the short run, at the profit maximizing level of output, the average revenue curve of a competitive firm lies above the average cost curve then:

The figure given below shows the demand and cost curves of a perfectly competitive firm.Figure: 10.4 D: Demand curve MC: Marginal cost curve ATC: Average-total cost curve AVC: Average-variable-cost curve -In the short run, certain costs, such as rent on land and equipment, must be paid whether or not any output is produced. These are:

Scenario 9.2 Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments. -If the market price of oats is $2.5 per bushel and a farmer decides to sell at $2.8 per bushel, he is likely to sell:

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.2 MC: Marginal cost curve MR: Marginal revenue curve ATC: Average-total-cost curve AVC: Average-variable-cost curve -A perfectly competitive firm decides to shut down if:

The following figure shows equilibrium at the industry and firm level.Figure 10.6 In the figure, S₁, S₂, S₃ are the market supply curves.D₁ and D₂ are the market demand curves.MC is the marginal cost curve of the firm.MR₁ and MR₂ are the marginal revenue curves of the firm.ATC is the average-total-cost curve of the firm. -According to Figure 10.6, an upward shift of the MR curve will result from:

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.1 -In the short run, if the marginal cost exceeds the marginal revenue, a perfectly competitive firm should:

The following figure shows equilibrium at the industry and firm level.Figure 10.6 In the figure, S₁, S₂, S₃ are the market supply curves.D₁ and D₂ are the market demand curves.MC is the marginal cost curve of the firm.MR₁ and MR₂ are the marginal revenue curves of the firm.ATC is the average-total-cost curve of the firm. -On August 5, 2003, a tragic fire destroyed a large Jim Beam whiskey factory in Kentucky. Assume that the U.S. market for whiskey is perfectly competitive, and that the market was originally in long run equilibrium. What would be the effects of such an incident?

Scenario 9.2 Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments. -For which of the following types of firm does the average revenue curve coincide with the marginal revenue curve?

The figure given below shows the demand and cost curves of a perfectly competitive firm.Figure: 10.4 D: Demand curve MC: Marginal cost curve ATC: Average-total cost curve AVC: Average-variable-cost curve -Refer to Figure 10.4. The firm faces a total _____ of _____.

The table given below shows the price of each unit of the product manufactured by a firm and the marginal cost of producing different units of the output.Table: 10.1 -A firm's total revenue is $400 for 8 units of output, $600 for 12 units of output, and $1,100 for 22 units of output. Evidently this firm is operating in a(n):

Scenario 9.2 Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments. -Which of the following statements characterizes perfect competition?

The table given below shows the price of each unit of the product manufactured by a firm and the marginal cost of producing different units of the output.Table: 10.1 -In which of the following situations will the profit of a perfectly competitive firm always increase with an increases in its output?