Exam 9: Firms in Perfectly Competitive Markets

Figure 9-5 Figure 9-5 shows cost and demand curves facing a typical firm in a constant-cost,perfectly competitive industry. -Refer to Figure 9-5.The firm's manager suggests that the firm's goal should be to maximize average profit.In that case,what is the output level and what is the average profit that will achieve the manager's goal?

Figure 9-6 Figure 9-6 shows cost and demand curves facing a profit-maximizing,perfectly competitive firm. -Refer to Figure 9-6.At price P₄,the firm would

Figure 9-11 -Refer to Figure 9-11.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 9-4 Figure 9-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market. -Refer to Figure 9-4.If the market price is $30,should the firm represented in the diagram continue to stay in business?

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?

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

Perfect competition is characterized by all of the following except

Under what conditions should a competitive firm shut down in the short run?

An industry's long-run supply curve shows

Which of the following is a characteristic of a monopoly?

Figure 9-2 -Refer to Figure 9-2.Why is the total revenue curve a ray from the origin?

In long-run perfectly competitive equilibrium,which of the following is false?

Consider the market for wheat which is a perfectly competitive market.Is the market demand curve the same as the demand curve facing an individual producer? If not,explain how and why they are different? Illustrate your answer graphically.

If the market price is $25 in a perfectly competitive market,the marginal revenue from selling the fifth unit is

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

Assume the market for organically-grown produce is perfectly competitive.All else equal,as farmers find it less profitable to produce and sell organic produce in this market,

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

If a firm's fixed cost exceeds its total revenue,the firm should stop production by shutting down temporarily.

An increase in a firm's fixed cost will not change the firm's profit-maximizing output in the short run.

Figure 9-4 Figure 9-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market. -Refer to Figure 9-4.If the market price is $30 and if the firm is producing output,what is the amount of its total variable cost?