Question 1

Table 14-2
The table represents a demand curve faced by a firm in a competitive market.
 
-Refer to Table 14-2.For a firm operating in a competitive market,the average revenue from selling 3 units is

Accepted Answer

A)   $12.
B)   $4.
C)   $3.
D)   $1.25.E) None of the above
F) A) and B)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Which of the following industries is most likely to exhibit the characteristic of free entry?

Accepted Answer

A)   nuclear power
B)   municipal water and sewer
C)   dairy farming
D)   airport securityE) All of the above
F) A) and B)

Question 4

Table 14-11
Suppose that a firm in a competitive market faces the following prices and costs:
 
-Refer to Table 14-11.If the firm is producing 2 units of output,it should

Accepted Answer

A)   produce more units of output because its marginal revenue is greater than its marginal cost.
B)   fewer units of output because its marginal revenue is less than its marginal cost.
C)   produce more units of output because its marginal revenue is less than its marginal cost.
D)   produce fewer units of output because its marginal revenue is greater than its marginal cost.E) C) and D)
F) B) and C)

Question 5

Figure 14-14  
-Refer to Figure 14-14.Assume that the market starts in equilibrium at point A in panel (b) .An increase in demand from D0 to D1 will result in

Accepted Answer

A)   a new market equilibrium at point D.
B)   an eventual increase in the number of firms in the market and a new long-run equilibrium at point C.
C)   rising prices and falling profits for existing firms in the market.
D)   falling prices and falling profits for existing firms in the market.E) A) and B)
F) None of the above

Question 6

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales.If the firm increases its output to 200 units,total revenue will be

Accepted Answer

A)   $2,000.
B)   $2,400.
C)   $4,200.
D)   We do not have enough information to answer the question.E) B) and C)
F) A) and B)

Question 7

Table 14-7
Suppose that a firm in a competitive market faces the following revenues and costs:
 
-Refer to Table 14-7.If the firm is maximizing profit,how much profit is it earning?

Accepted Answer

A)   $0
B)   $1
C)   $10
D)   There is insufficient data to determine the firm's profit.E) All of the above
F) B) and C)

Question 8

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 is $5.00,the firm will earn

Accepted Answer

A)   positive economic profits in the short run.
B)   negative economic profits in the short run but remain in business.
C)   negative economic profits and shut down.
D)   zero economic profits in the short run.E) B) and C)
F) All of the above

Question 9

In a certain market there are many buyers and many sellers.It is easy to distinguish the product sold by one firm from the products sold by other firms.Is the market competitive?

Accepted Answer

The market is not competitive ...

Question 10

Which of the following firms is the closest to being a perfectly competitive firm?

Accepted Answer

A)   a hot dog vendor in New York
B)   Microsoft Corporation
C)   Ford Motor Company
D)   the campus bookstoreE) A) and B)
F) None of the above

Question 11

A firm in a competitive market currently produces and sells 500 doorknobs for a price of $10 per doorknob.Which of the following events would decrease the firm's average revenue?

Accepted Answer

A)   The firm increases its output above 500 doorknobs.
B)   The firm decreases its output below 500 doorknobs.
C)   The market price of doorknobs rises above $10.
D)   The market price of doorknobs falls below $10.E) All of the above
F) B) and D)

Question 12

If a firm can influence the market price of the good it sells,then it is said to have __________.

Accepted Answer

The answer of If a firm can influence the market...

Question 13

The long-run equilibrium in a competitive market characterized by firms with identical costs is generally characterized by firms operating at efficient scale.

Accepted Answer

A) True 
 B)False

Question 14

Suppose the long-run supply curve for a good is upward-sloping.The upward slope could be explained by

Accepted Answer

A)   increases in production costs resulting from more firms coming into the market.
B)   a breakdown of the "free entry and exit" feature of competition.
C)   a breakdown of the "price taking" feature of competition.
D)   a stable demand curve for the good,that is,a demand curve that never shifts.E) A) and B)
F) C) and D)

Question 15

Comparing marginal revenue to marginal cost (i) 
Reveals the contribution of the last unit of production to total profit.
(ii) 
Is helpful in making profit-maximizing production decisions.
(iii) 
Tells a firm whether its fixed costs are too high.

Accepted Answer

A)   (i) only
B)   (i) and (ii) only
C)   (ii) and (iii) only
D)   (i) and (iii) onlyE) None of the above
F) A) and B)

Question 16

If a firm operating in a competitive industry shuts down in the short run,it can avoid paying

Accepted Answer

A)   fixed costs.
B)   variable costs.
C)   total costs.
D)   The firm must pay all its costs,even if it shuts down.E) A) and D)
F) B) and D)

Question 17

A competitive firm currently produces and sells 500 units of output.Its total revenue is $6,000;the marginal cost of producing the 500th unit of output is $14.50;and the average total cost of producing the 500th unit of output is $9.50.Is the firm maximizing its profit,or should it increase or decrease output in order to increase its profit?

Accepted Answer

For this firm,price = marginal...

Question 18

Suppose a firm in a competitive market earned $1,000 in total revenue and had a marginal revenue of $10 for the last unit produced and sold.What is the average revenue per unit,and how many units were sold?

Accepted Answer

A)   $5 and 50 units
B)   $5 and 100 units
C)   $10 and 50 units
D)   $10 and 100 unitsE) A) and B)
F) All of the above

Question 19

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

Accepted Answer

A)   market entrants.
B)   monopolists.
C)   free riders.
D)   price takers.E) A) and B)
F) All of the above

Question 20

Figure 14-11 
-Refer to Figure 14-11.The figure above is for a firm operating in a competitive industry.If there were eight identical firms in the industry,which of the following price-quantity combinations would be on the market supply curve?

Accepted Answer

A)   A only
B)   A and C only
C)   B only
D)   B and D onlyE) A) and B)
F) A) and C)

Exam 14: Firms in Competitive Markets

Suppose a firm in a competitive market earned $1,000 in total revenue and had a marginal revenue of $10 for the last unit produced and sold.What is the average revenue per unit,and how many units were sold?

Correct Answer
verified

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

Correct Answer
verified

Suppose the long-run supply curve for a good is upward-sloping.The upward slope could be explained by

Correct Answer
verified

In a certain market there are many buyers and many sellers.It is easy to distinguish the product sold by one firm from the products sold by other firms.Is the market competitive?

Correct Answer
verified
The market is not competitive ...
View Answer

Comparing marginal revenue to marginal cost (i) Reveals the contribution of the last unit of production to total profit. (ii) Is helpful in making profit-maximizing production decisions. (iii) Tells a firm whether its fixed costs are too high.

Correct Answer
verified

A firm in a competitive market currently produces and sells 500 doorknobs for a price of $10 per doorknob.Which of the following events would decrease the firm's average revenue?

Correct Answer
verified

Figure 14-14 -Refer to Figure 14-14.Assume that the market starts in equilibrium at point A in panel (b) .An increase in demand from D0 to D1 will result in

Correct Answer
verified

The long-run equilibrium in a competitive market characterized by firms with identical costs is generally characterized by firms operating at efficient scale.

Correct Answer
verified

If a firm operating in a competitive industry shuts down in the short run,it can avoid paying

Correct Answer
verified

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales.If the firm increases its output to 200 units,total revenue will be

Correct Answer
verified

If a firm can influence the market price of the good it sells,then it is said to have __________.

Correct Answer
verified

Which of the following firms is the closest to being a perfectly competitive firm?

Correct Answer
verified

Table 14-11 Suppose that a firm in a competitive market faces the following prices and costs: -Refer to Table 14-11.If the firm is producing 2 units of output,it should

Correct Answer
verified

Figure 14-11 -Refer to Figure 14-11.The figure above is for a firm operating in a competitive industry.If there were eight identical firms in the industry,which of the following price-quantity combinations would be on the market supply curve?

Correct Answer
verified

Table 14-2 The table represents a demand curve faced by a firm in a competitive market. -Refer to Table 14-2.For a firm operating in a competitive market,the average revenue from selling 3 units is

Correct Answer
verified

Which of the following industries is most likely to exhibit the characteristic of free entry?

Correct Answer
verified

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 is $5.00,the firm will earn

Correct Answer
verified

Correct Answer
verified
For this firm,price = marginal...
View Answer

Table 14-7 Suppose that a firm in a competitive market faces the following revenues and costs: -Refer to Table 14-7.If the firm is maximizing profit,how much profit is it earning?

Correct Answer
verified

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

Correct Answer
verified

Exam 14: Firms in Competitive Markets

Suppose a firm in a competitive market earned $1,000 in total revenue and had a marginal revenue of $10 for the last unit produced and sold.What is the average revenue per unit,and how many units were sold?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose the long-run supply curve for a good is upward-sloping.The upward slope could be explained by

Correct AnswerverifiedShow Answer

In a certain market there are many buyers and many sellers.It is easy to distinguish the product sold by one firm from the products sold by other firms.Is the market competitive?

Correct AnswerverifiedThe market is not competitive ...View AnswerShow Answer

Comparing marginal revenue to marginal cost (i) Reveals the contribution of the last unit of production to total profit. (ii) Is helpful in making profit-maximizing production decisions. (iii) Tells a firm whether its fixed costs are too high.

Correct AnswerverifiedShow Answer

A firm in a competitive market currently produces and sells 500 doorknobs for a price of $10 per doorknob.Which of the following events would decrease the firm's average revenue?

Correct AnswerverifiedShow Answer

Figure 14-14 -Refer to Figure 14-14.Assume that the market starts in equilibrium at point A in panel (b) .An increase in demand from D0 to D1 will result in

Correct AnswerverifiedShow Answer

The long-run equilibrium in a competitive market characterized by firms with identical costs is generally characterized by firms operating at efficient scale.

Correct AnswerverifiedShow Answer

If a firm operating in a competitive industry shuts down in the short run,it can avoid paying

Correct AnswerverifiedShow Answer

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales.If the firm increases its output to 200 units,total revenue will be

Correct AnswerverifiedShow Answer

If a firm can influence the market price of the good it sells,then it is said to have __________.

Correct AnswerverifiedShow Answer

Which of the following firms is the closest to being a perfectly competitive firm?

Correct AnswerverifiedShow Answer

Table 14-11 Suppose that a firm in a competitive market faces the following prices and costs: -Refer to Table 14-11.If the firm is producing 2 units of output,it should

Correct AnswerverifiedShow Answer

Figure 14-11 -Refer to Figure 14-11.The figure above is for a firm operating in a competitive industry.If there were eight identical firms in the industry,which of the following price-quantity combinations would be on the market supply curve?

Correct AnswerverifiedShow Answer

Table 14-2 The table represents a demand curve faced by a firm in a competitive market. -Refer to Table 14-2.For a firm operating in a competitive market,the average revenue from selling 3 units is

Correct AnswerverifiedShow Answer

Which of the following industries is most likely to exhibit the characteristic of free entry?

Correct AnswerverifiedShow Answer

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 is $5.00,the firm will earn

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFor this firm,price = marginal...View AnswerShow Answer

Table 14-7 Suppose that a firm in a competitive market faces the following revenues and costs: -Refer to Table 14-7.If the firm is maximizing profit,how much profit is it earning?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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The market is not competitive ...
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For this firm,price = marginal...
View Answer

Correct Answer
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Correct Answer
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