Exam 12: Firms in Perfectly Competitive Markets

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 and if the firm is producing output,what is the amount of its total variable cost?

Figure 12-11 -Refer to Figure 12-11.If this is a constant-cost industry,what is the market price in the long-run equilibrium?

A perfectly competitive wheat farmer in a constant-cost industry produces 1,000 bushels of wheat at a total cost of $50,000.The prevailing market price is $48.What will happen to the market price of wheat in the long run?

Competition has driven the economic profits in the video rental business to zero.Surya Bacha,who owns a video rental business,would be better off leaving the industry for another alternative.

Which of the following offers the best reason why restaurants are not considered to be perfectly competitive firms?

Which of the following statements is correct?

Both individual buyers and sellers in perfect competition

Firms that are price takers

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

A very large number of small sellers who sell identical products imply

Figure 12-9 shows cost and demand curves facing a profit-maximizing,perfectly competitive firm. -Refer to Figure 12-9.At price P1,the firm would produce

Quantity Total Cost Average Total Cost Marginal Cost 0 \ 10.00 ---- ---- 1 15.00 \ 15.00 \ 5.00 2 17.50 8.75 2.50 3 22.50 7.50 5.00 4 30.00 7.50 7.50 5 40.00 8.00 10.00 6 52.50 8.75 12.50 7 67.50 9.64 15.00 8 85.00 10.63 17.50 9 105.00 11.67 20.00 Arnie sells basketballs in a perfectly competitive market.Table 12-3 summarizes Arnie's output per day (Q),total cost (TC),average total cost (ATC)and marginal cost (MC). -Refer to Table 12-3.What will Arnie's output be and how much profit will he earn if the market price of basketballs is $5.00?

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

What characteristic of a competitive market has made the "long run pretty short" in the market for iPhone applications?

A perfectly competitive firm in a constant-cost industry produces 1,000 units of a good at a total cost of $50,000.The prevailing market price is $48.Assuming that this firm continues to produce in the long run,what happens to output level in the long run?

The delivery of first-class mail by the U.S.Postal Service is an example of

If productive efficiency characterizes a market

Figure 12-9 shows cost and demand curves facing a profit-maximizing,perfectly competitive firm. -Refer to Figure 12-9.At price P4,the firm would

Figure 12-2 -Refer to Figure 12-2.Why is the total revenue curve a ray from the origin?

A perfectly competitive firm has to charge the same price as every other firm in the market.Therefore,the firm