Exam 13: Firms in Competitive Markets

Scenario 14-1 Assume a certain firm in a competitive market is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. -Refer to Scenario 14-1. To maximize its profit, the firm should

When new firms enter a perfectly competitive market,

Figure 14-7 -Refer to Figure 14-7. Suppose the price of the good is $175. If the firm produces and sells 515 units of output, its total revenue is

A dairy farmer must be able to calculate sunk costs in order to determine how much revenue the farm receives for the typical gallon of milk.

In the long-run equilibrium of a market with free entry and exit, marginal firms are operating

Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: -Refer to Figure 14-1. The firm should shut down if the market price is

The long-run supply curve for a competitive industry

In the short run, a firm operating in a competitive industry will produce the quantity of output where price equals marginal cost as long as the

A firm in a competitive market has the following cost structure: If the firm's fixed cost of production is $3, and the market price is $10, how many units should the firm produce to maximize profit?

Suppose that a firm operating in perfectly competitive market sells 50 units of output. Its total revenues from the sale are $500. Which of the following statements is correct? i) Marginal revenue equals $5. Ii) Average revenue equals $10. Iii) Price equals $15.

Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: -Refer to Figure 14-1. The firm's short­run supply curve is its marginal cost curve above

Which of the following statements is not correct about competitive firms?

When price exceeds average variable cost in the short run, a competitive firm's marginal cost curve is regarded as its supply curve because

Scenario 14-3 Suppose a certain competitive firm is producing Q=500 units of output. The marginal cost of the 500th unit is $17, and the average total cost of producing 500 units is $12. The firm sells its output for $20. -Refer to Scenario 14-3. If the marginal cost of producing the 501st unit would be $19, producing and selling the 501st unit would

For a competitive firm,

When total revenue is less than variable costs, a firm in a competitive market will

In the short run, a firm operating in a competitive industry will shut down if price is

Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: -Refer to Figure 14-1. If the market price is $6.30, the firm will earn

Suppose the long-run supply curve for a good is upward-sloping. The upward slope could be explained by

A competitive firm is currently producing a quantity of output at which marginal revenue exceeds marginal cost. In order to increase its profit, the firm should