Exam 12: Firms in Perfectly Competitive Markets

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.If the market price of each camera case is $8,what is the profit-maximizing quantity?

If,in a perfectly competitive industry,the market price facing a firm is above its average total cost at the output where marginal revenue equals marginal cost,then

Using two graphs,illustrate how a positive technological change in the market for notebook computers could eliminate short-run economic profit for a firm in that market.On the first graph,use a supply and demand graph to illustrate the positive technological change.On the second graph,use demand,ATC,MC and MR curves to illustrate the elimination of economic profit resulting from the positive technological change.Explain what is taking place in each graph.

Which of the following is the best example of a perfectly competitive industry?

In an increasing-cost industry the long-run supply curve is upward sloping.

What is productive efficiency?

In perfect competition

If in the long run a firm makes zero profit,it should exit the industry.

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

A perfectly competitive wheat farmer in a constant-cost industry produces 3,000 bushels of wheat at a total cost of $36,000.The prevailing market price is $15.What will happen to the market price of wheat in the long run?

Figure 12-11 -Refer to Figure 12-11.Assume that the medical screening industry is perfectly competitive and that some firms are making short-run losses.Suppose the medical screening industry runs an effective advertising campaign which convinces a large number of people that yearly CT scans are critical for good health.Which of the diagrams in the figure best describes what happens in the industry?

Figure 12-4 Figure 12-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market. -Refer to Figure 12-4.If the market price is $30,should the firm represented in the diagram continue to stay in business?

The minimum point on the average variable cost curve is called the loss-minimizing point.

Which of the following is a characteristic of an oligopolistic market structure?

Figure 12-1 -Refer to Figure 12-1.If the firm is producing 200 units,

If a typical firm in a perfectly competitive industry is incurring losses,then

Figure 12-5 Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry. -Refer to Figure 12-5.If the market price is $20,what is the amount of the firm's profit?

A perfectly competitive firm in a constant-cost industry produces 1,000 units of a good at a total cost of $50,000.If the prevailing market price is $48,the number of firms and the industry's output will decrease in the long run.

Which of the following describes a situation in which a good or service is produced at the lowest possible cost?

A perfectly competitive firm's marginal revenue curve is downward sloping.