Exam 13: Firms in Competitive Markets

In the short run, a market consists of 100 identical firms. The market price is $6, and the total cost to each firm of producing various levels of output is given in the table below. What will total quantity supplied be in the market?

Consider a firm operating in a competitive market. The firm is producing 40 units of output, has an average total cost of production equal to $6, and is earning $240 economic profit in the short run. What is the current market price?

A profit-maximizing firm in a competitive market will earn zero accounting profits in the long run.

Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes per month. Her monthly total revenue is $5,000. The marginal cost of making a wedding cake is $200. In order to maximize profits, Laura should

Suppose that firms in a competitive industry are earning positive economic profits. All else equal, in the long run, we would expect the number of firms in the industry to

Free entry means that

Roger owns a small health store that sells vitamins in a perfectly competitive market. If vitamins sell for $12 per bottle and the average total cost per bottle is $11.50 at the profit-maximizing output level, then in the long run

Susan quit her job as a teacher, which paid her $36,000 per year, in order to start her own catering business. She spent $12,000 of her savings, which had been earning 10 percent interest per year, on equipment for her business. She also borrowed $12,000 from her bank at 10 percent interest, which she also spent on equipment. For the past several months she has spent $1,000 per month on ingredients and other variable costs. Also for the past several months she has earned $4,500 in monthly revenue. In the short run, Susan should

The long-run market supply curve in a competitive market will

In a competitive market the current price is $5. The typical firm in the market has ATC = $5.50 and AVC = $4.50.

A profit-maximizing firm in a competitive market will increase production when average revenue exceeds marginal cost.

If Bradley's Butcher Shop sells its product in a competitive market, then

Figure 14-5 Suppose a firm operating in a competitive market has the following cost curves: -Refer to Figure 14-5. When market price is P7, a profit-maximizing firm's short-run profits can be represented by the area

When economists refer to a production cost that has already been committed and cannot be recovered, they use the term

For a firm operating in a perfectly competitive industry, total revenue, marginal revenue, and average revenue are all equal.

If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will

For any given price, a firm in a competitive market will maximize profit by selecting the level of output at which price intersects the

When buyers in a competitive market take the selling price as given, they are said to be

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 rises above $6.30, the firm will earn

Which of the following is not a characteristic of a perfectly competitive market?