Exam 12: Firms in Perfectly Competitive Markets

Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service. Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price?

A firm's total profit can be calculated as all of the following except

A perfectly competitive firm breaks even at a price equal to its minimum average total cost.

In a perfectly competitive industry, in the long-run equilibrium,

For a perfectly competitive firm, which of the following is not true at profit maximization?

Table 12-1 Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. -Refer to Table 12-1. What is the fixed cost of production?

If a perfectly competitive apple farm's marginal revenue exceeds the marginal cost of the last bushel of apples sold, what should the farm do to maximize its profit?

Figure 12-8 -Refer to Figure 12-8. Suppose the market price is $120. Which of the following is true?

Which of the following characteristics of a farmers' market make it a good example of a perfectly competitive market?

Fill in the columns in the following table and use the values in the table to determine the profit-maximizing level of output.

The demand curve for an individual seller's product in perfect competition is

Figure 12-6 Figure 12-6 shows the demand, marginal cost (MC) and average total cost (ATC) curves for Jason's House of Apples. -Refer to Figure 12-6. Jason is currently producing 20 thousand pounds of apples. To maximize his profit Jason should

Figure 12-10 -In the short run, if a firm shuts down, its maximum loss equals the amount of its fixed cost.

A perfectly competitive firm's horizontal demand curve implies that the firm does not have to lower its price to sell more output.

If a firm shuts down in the short run, it will

Ben's Peanut Shoppe suffers a short-run loss. Ben will not choose to shut down if

What is meant by the term "long-run competitive equilibrium"?

Figure 12-1 -Refer to Figure 12-1. If the firm is producing 700 units, what is the amount of its profit or loss?

Figure 12-8 -Refer to Figure 12-8. Suppose the firm produces 4,000 units. What does the shaded area labeled A represent?

New York Times writer Michael Lewis wrote that "The sad truth, for investors, seems to be that most of the benefits... are passed through to consumers free of charge." To which of the following did Lewis refer?