Exam 9: Firms in Perfectly Competitive Markets

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 P₃,the firm would

Which of the following statements is correct?

Assuming a market price of $4,fill in the columns in the following table.What is the profit-maximizing level of production? What are the two ways to determine the profit-maximizing level of production?

Suppose there are economies of scale in the production of a specialized memory chip that is used in manufacturing microwaves.This suggests that the microwave industry is a decreasing-cost industry.

Which of the following is not a characteristic of a monopolistically competitive market structure?

Figure 9-12 -Use the figure above to answer the following questions. a.How can you determine that the figure represents a graph of a perfectly competitive firm? Be specific;indicate which curve gives you the information and how you use this information to arrive at your conclusion. b.What is the market price? c.What is the profit-maximizing output? d.What is total revenue at the profit-maximizing output? e.What is the total cost at the profit-maximizing output? f.What is the profit or loss at the profit-maximizing output? g.What is the firm's total fixed cost? h.What is the total variable cost? i.Identify the firm's short-run supply curve. j.Is the industry in a long-run equilibrium? k.If it is not in long-run equilibrium,what will happen in this industry to restore long-run equilibrium? l.In long-run equilibrium,what is the firm's profit maximizing quantity?

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.Suppose the fixed cost of production rises by $500 and the price per unit is still $8.What happens to the firm's profit-maximizing output level?

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

Figure 9-1 -Refer to Figure 9-1.If the firm is producing 700 units,

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.The firm will not produce in the short run if the output price falls below

Figure 9-13 -Refer to Figure 9-13.If the market price is P₁,what is the allocatively efficient output level?

In early 2007,Pioneer and JVC,two Japanese electronics firms,each announced that their profits were going to be lower than expected because they both had to cut prices for LCD and plasma television sets.Which of the following could explain why these firms did not simply raise their prices and increase their profits?

Which of the following is the best example of a perfectly competitive industry?