Exam 9: Firms in Perfectly Competitive Markets

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 the firm is producing output,what is the amount of the firm's profit or loss?

The market demand curve for a perfectly competitive industry is the horizontal summation of each individual firm's demand curve.

Table 9-1 Table 9-1 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 9-1.If the market price of each camera case is $8,what is the profit-maximizing quantity?

When a perfectly competitive firm finds that its market price is below its minimum average variable cost,it will sell

If,for a perfectly competitive firm,price exceeds the marginal cost of production,the firm should

Figure 9-9 -Refer to Figure 9-9.Suppose the prevailing price is P₁ and the firm is currently producing its loss-minimizing quantity.If the firm represented in the diagram continues to stay in business,in the long-run equilibrium,

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.If the firm does this,what is the amount of profit that it will earn?

What is allocative efficiency?

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

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

Figure 9-1 -Refer to Figure 9-1.If the firm is producing 200 units,

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 P₂,the firm would produce

A perfectly competitive market is in long-run equilibrium.At present there are 100 identical firms each producing 5,000 units of output.The prevailing market price is $20.Assume that each firm faces increasing marginal cost.Now suppose there is a sudden increase in demand for the industry's product which causes the price of the good to rise to $24.Which of the following describes the effect of this increase in demand on a typical firm in the industry?

Figure 9-11 -Refer to Figure 9-11.Suppose a typical firm in a perfectly competitive market is earning economic profits in the short run.Which of the diagrams in the figure depicts what happens to in the industry as it transitions to along run equilibrium?

Without government subsidization,the conversion of farmland in the United Kingdom from conventional to organic production will generally cause a farmer's

Apple introduced its iPhone 3G in July 2008 and within a month sales had topped 3 million units.By April 2009,more than 25,000 apps for the iPhone 3G were available in the iTunes store,an indication that in a competitive market

In a graph with output on the horizontal axis and total revenue on the vertical axis,what is the shape of the total revenue curve for a perfectly competitive seller?

In the short run,if price falls below a firm's minimum average total cost,the firm should shut down.

Assume that the LCD and plasma television sets industry is perfectly competitive.Suppose a producer develops a successful innovation that enables it to lower its cost of production.What happens in the short run and in the long run?

What is meant by productive efficiency? How does a perfectly competitive firm achieve productive efficiency?