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# Microeconomics Study Set 27

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## Quiz 9 : Competitive Markets

Consider the price and quantity data below for a perfectly competitive firm producing mousetraps. TABLE 9- 1 -Refer to Table 9- 1.Suppose this firm is producing 1500 mousetraps and its average total cost is $5.10 per unit.The firm will be Free Multiple Choice Answer: Answer: E If a firm in a perfectly competitive market were to raise its price,its Free Multiple Choice Answer: Answer: E The perfectly elastic demand curve faced by a competitive firm means that Free Multiple Choice Answer: Answer: C Consider the following short- run cost curves for a profit- maximizing firm in a perfectly competitive industry. FIGURE 9- 2 -Refer to Figure 9- 2.If the market price is$2,the firm will
Multiple Choice
Consider the following cost curves for Firm X,a perfectly competitive firm. FIGURE 9- 5 -Refer to Figure 9- 5.If Firm X has a capital stock that generates SRATC1,then in the long run Firm X will have to
Multiple Choice
If firms in a competitive industry are earning positive economic profits,in the long run we expect
Multiple Choice
A perfectly competitive firm's total revenue is equal to which of the following?
Multiple Choice
Refer to Table 9- 1.Suppose this firm is producing 1250 mousetraps and its average total cost is $4 per unit.The firm will be Multiple Choice Answer: Firms have several different concepts of revenue: total revenue,average revenue,marginal revenue,and price.For a profit- maximizing perfectly competitive firm,which statement below is true? Multiple Choice Answer: The short- run supply curve for a perfectly competitive firm is Multiple Choice Answer: On a graph showing a firm's TC and TR curves,the profit- maximizing level of output is found where Multiple Choice Answer: Assume the following total cost schedule for a perfectly competitive firm. TABLE 9- 2 -Refer to Table 9- 2.If the firm is producing at an output level of 2 units,the ATC is _ and the AVC is _ . Multiple Choice Answer: The theory of perfect competition is built on several assumptions,including that Multiple Choice Answer: Consider the following cost curves for Firm X,a perfectly competitive firm. FIGURE 9- 5 -Refer to Figure 9- 5.If Firm X is producing output Q1 and the market price is P1, Multiple Choice Answer: Consider a perfectly competitive firm that is producing a level of output such that price equals average total cost and average total cost is less than marginal cost.In order to maximize its profits,the firm should Multiple Choice Answer: Comparing the short- run and long- run profit- maximizing positions of a perfectly competitive firm,which statement is true? Multiple Choice Answer: Consider a perfectly competitive firm in the following position: output = 4000 units,market price =$1,fixed costs = $2000,variable costs =$2000,and marginal cost = \$1.To maximize profits the firm should