Question 1

Farmer Anna is producing tomatoes in a perfectly competitive market.In Year 1 she sells 4000 bushels of tomatoes at a price of $12.00 each.In Year 2 she sells 4800 bushels at $13.00 each.In Year 2,her average revenue is ________ and her marginal revenue is ________.

Accepted Answer

In a perfectly competitive market, the price is equal to both the average revenue and the marginal revenue. Therefore, in Year 2, both the average revenue and marginal revenue are $13.00.

Question 2

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.05 per unit and the firm is currently producing 600 000 units per month.What is the firm's average revenue?

Accepted Answer

Average revenue is the revenue generated per unit of output. In a perfectly competitive market, the price is equal to the average revenue. Therefore, the firm's average revenue is equal to the market price, which is $0.05 per unit. So, the answer is D.

Question 3

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
  TABLE 9-2
-Refer to Table 9-2.What is the marginal cost of producing the 2nd unit of output?

Accepted Answer

The answer of 9.3 Short-Run Decisions
Assume the following total cost...

Question 4

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
  TABLE 9-2
-Refer to Table 9-2.What is the marginal cost of producing the 5th unit of output?

Accepted Answer

The answer of 9.3 Short-Run Decisions
Assume the following total cost...

Question 5

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
  TABLE 9-2
-Refer to Table 9-2.The total cost of producing 6 units of output is

Accepted Answer

The answer of 9.3 Short-Run Decisions
Assume the following total cost...

Question 6

9.3 Short-Run Decisions
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 6 units,the ATC is ________ and the AVC is ________.

Accepted Answer

The ATC (Average Total Cost) is calculated by dividing the total cost by the quantity of output. If the ATC is $71.67 and the AVC (Average Variable Cost) is $55 for 6 units, these values are consistent with the given options.

Question 7

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 currently selling 1750 mousetraps at the market price of $5.If the firm raises its price to $6,it's average revenue will be

Accepted Answer

The answer of Consider the price and quantity data below...

Question 8

For a given market price,a perfectly competitive firm's marginal-revenue curve

Accepted Answer

In a perfectly competitive market, a firm's marginal revenue (MR) is equal to the market price, which is constant. Therefore, the MR curve is a horizontal line, which is the same as the firm's demand curve.

Question 9

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
  TABLE 9-2
-Refer to Table 9-2.At what price would a profit-maximizing firm earn zero economic profits?

Accepted Answer

To find the price at which a profit-maximizing firm would earn zero economic profits, we need to find where the firm's total revenue (P x Q) would be equal to its total cost (TC) that includes both fixed and variable costs. 
At a price of $70, the quantity demanded would be 12 and the total revenue would be $840. The total cost at this output level would be $840, which means that the profit earned would be zero. At any other price level, the profit would be negative or positive, depending on the price and output level. Therefore, the correct answer is B.

Question 10

For a given market price,a perfectly competitive firm's average-revenue curve

Accepted Answer

In perfect competition, the firm's average revenue (AR) is equal to the market price, which is constant. Therefore, the AR curve is a horizontal line and is the same as the firm's demand curve.

Question 11

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
  TABLE 9-2
-Refer to Table 9-2.In order to maximize its profits,the firm should continue to produce in the short run even if the market price is less than its ATC as long as the price is greater than or equal to

Accepted Answer

In the short-run, a perfectly competitive firm should continue to produce as long as price is greater than or equal to average variable cost (AVC) to cover its variable costs. If price falls below AVC, the firm should shut down and only incur its fixed costs. This is because the firm can always exit the market in the long run and avoid its fixed costs, but it cannot recover its variable costs in the short run. Therefore, the best choice for the firm to continue producing in the short run is when price is greater than or equal to AVC.

Question 12

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.04 per unit and the firm is currently producing 1 million units per month.The firm's total revenue is ________ per month.The firm's marginal revenue is ________.

Accepted Answer

Total Revenue = Price x Quantity = $0.04 x 1,000,000 = $40,000

In a perfectly competitive market, the marginal revenue is equal to the market price, which is $0.04. Therefore:

Marginal Revenue = $0.04

Option B is the correct answer as it matches the total revenue and marginal revenue calculation.

Question 13

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
  TABLE 9-2
-Refer to Table 9-2.If the market price were $75,this perfectly competitive firm wishing to maximize its profits would

Accepted Answer

At a price of $75, the firm should produce the quantity at which marginal cost equals price, which is 5 units of output. This is the level of output where the marginal cost curve intersects with the horizontal line at $75. At this level of output, the firm's total cost is $410, and its total revenue is $375, resulting in a loss. However, producing at any other level of output would result in an even greater loss. Therefore, the best choice for the firm is to produce 5 units of output.

Question 14

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 currently selling 1750 mousetraps at the market price of $5.If the firm raises its price to $6,its total revenue will be

Accepted Answer

The answer of Consider the price and quantity data below...

Question 15

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.04 per unit and the firm is selling 1 million units per month.Now suppose the firm increases its stated price to $0.05 per unit.According to the theory of perfect competition,the result will be

Accepted Answer

In a perfectly competitive market, firms are price takers and cannot set prices above the market price. If XYZ Corp. raises its price above the market price, it will sell zero units, causing total revenue to fall to zero.

Question 16

9.3 Short-Run Decisions
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 ________.

Accepted Answer

The Average Total Cost (ATC) is calculated by dividing the total cost by the quantity of output. The Average Variable Cost (AVC) is calculated by dividing the total variable cost by the quantity of output. Based on the given options, $85 for ATC and $35 for AVC are the correct values for an output level of 2 units.

Question 17

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.05 per unit and the firm is currently producing 600 000 units per month.The firm's total revenue is ________ per month.The firm's marginal revenue is ________.

Accepted Answer

The firm's total revenue is calculated by multiplying the market price ($0.05) by the quantity produced (600,000 units), which equals $30,000. In a perfectly competitive market, the marginal revenue is equal to the market price, which is $0.05.

Question 18

9.3 Short-Run Decisions
Assume the following total cost schedule for a perfectly competitive firm.
  TABLE 9-2
-Refer to Table 9-2.This profit-maximizing firm would produce no output in the short run if the market price of its output dropped below

Accepted Answer

The firm would produce no output in the short run if the market price is below the average variable cost (AVC). If $35 is the AVC, the firm would shut down if the price drops below this level.

Question 19

9.3 Short-Run Decisions
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 4 units,the ATC is ________ and the AVC is ________.

Accepted Answer

The ATC at an output level of 4 units can be calculated by dividing the total cost ($280) by the output level (4), which equals $70. The AVC can be found by dividing total variable cost ($180) by the output level (4), which equals $45. Therefore, the correct answer is C ($70 for ATC and $45 for AVC).

There is only one correct choice in this question.

Question 20

Consider the price and quantity data below for a perfectly competitive firm producing mousetraps.
  TABLE 9-1
-Refer to Table 9-1.If this firm is producing 1250 mousetraps,its total revenue is ________,its average revenue is ________ and its marginal revenue is ________.

Accepted Answer

Total revenue is calculated by multiplying the quantity (1250) by the price per unit ($5), which equals $6250. Average revenue is total revenue divided by quantity, which is $5. Marginal revenue is the additional revenue from selling one more unit, which is also $5.

Quiz 9: Competitive Markets

Farmer Anna is producing tomatoes in a perfectly competitive market.In Year 1 she sells 4000 bushels of tomatoes at a price of $12.00 each.In Year 2 she sells 4800 bushels at $13.00 each.In Year 2,her average revenue is and her marginal revenue is .

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.05 per unit and the firm is currently producing 600 000 units per month.What is the firm's average revenue?

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.What is the marginal cost of producing the 2nd unit of output?

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.What is the marginal cost of producing the 5th unit of output?

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.The total cost of producing 6 units of output is

9.3 Short-Run Decisions 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 6 units,the ATC is and the AVC is .

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 currently selling 1750 mousetraps at the market price of $5.If the firm raises its price to $6,it's average revenue will be

For a given market price,a perfectly competitive firm's marginal-revenue curve

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.At what price would a profit-maximizing firm earn zero economic profits?

For a given market price,a perfectly competitive firm's average-revenue curve

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.04 per unit and the firm is currently producing 1 million units per month.The firm's total revenue is per month.The firm's marginal revenue is .

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.If the market price were $75,this perfectly competitive firm wishing to maximize its profits would

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 currently selling 1750 mousetraps at the market price of $5.If the firm raises its price to $6,its total revenue will be

9.3 Short-Run Decisions 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 .

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.05 per unit and the firm is currently producing 600 000 units per month.The firm's total revenue is per month.The firm's marginal revenue is .

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.This profit-maximizing firm would produce no output in the short run if the market price of its output dropped below

9.3 Short-Run Decisions 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 4 units,the ATC is and the AVC is .

Consider the price and quantity data below for a perfectly competitive firm producing mousetraps. TABLE 9-1 -Refer to Table 9-1.If this firm is producing 1250 mousetraps,its total revenue is ,its average revenue is and its marginal revenue is .

Quiz 9: Competitive Markets

Farmer Anna is producing tomatoes in a perfectly competitive market.In Year 1 she sells 4000 bushels of tomatoes at a price of $12.00 each.In Year 2 she sells 4800 bushels at $13.00 each.In Year 2,her average revenue is ________ and her marginal revenue is ________.

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.05 per unit and the firm is currently producing 600 000 units per month.What is the firm's average revenue?

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.What is the marginal cost of producing the 2nd unit of output?

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.What is the marginal cost of producing the 5th unit of output?

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.The total cost of producing 6 units of output is

9.3 Short-Run Decisions 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 6 units,the ATC is ________ and the AVC is ________.

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 currently selling 1750 mousetraps at the market price of $5.If the firm raises its price to $6,it's average revenue will be

For a given market price,a perfectly competitive firm's marginal-revenue curve

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.At what price would a profit-maximizing firm earn zero economic profits?

For a given market price,a perfectly competitive firm's average-revenue curve

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.04 per unit and the firm is currently producing 1 million units per month.The firm's total revenue is ________ per month.The firm's marginal revenue is ________.

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.If the market price were $75,this perfectly competitive firm wishing to maximize its profits would

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 currently selling 1750 mousetraps at the market price of $5.If the firm raises its price to $6,its total revenue will be

9.3 Short-Run Decisions 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 ________.

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.05 per unit and the firm is currently producing 600 000 units per month.The firm's total revenue is ________ per month.The firm's marginal revenue is ________.

9.3 Short-Run Decisions Assume the following total cost schedule for a perfectly competitive firm. TABLE 9-2 -Refer to Table 9-2.This profit-maximizing firm would produce no output in the short run if the market price of its output dropped below

9.3 Short-Run Decisions 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 4 units,the ATC is ________ and the AVC is ________.

Consider the price and quantity data below for a perfectly competitive firm producing mousetraps. TABLE 9-1 -Refer to Table 9-1.If this firm is producing 1250 mousetraps,its total revenue is ________,its average revenue is ________ and its marginal revenue is ________.

Farmer Anna is producing tomatoes in a perfectly competitive market.In Year 1 she sells 4000 bushels of tomatoes at a price of $12.00 each.In Year 2 she sells 4800 bushels at $13.00 each.In Year 2,her average revenue is and her marginal revenue is .

9.3 Short-Run Decisions 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 6 units,the ATC is and the AVC is .

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.04 per unit and the firm is currently producing 1 million units per month.The firm's total revenue is per month.The firm's marginal revenue is .

9.3 Short-Run Decisions 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 .

Suppose XYZ Corp.is producing and selling disposable wooden chopsticks in a perfectly competitive market.The market price is $0.05 per unit and the firm is currently producing 600 000 units per month.The firm's total revenue is per month.The firm's marginal revenue is .

9.3 Short-Run Decisions 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 4 units,the ATC is and the AVC is .

Consider the price and quantity data below for a perfectly competitive firm producing mousetraps. TABLE 9-1 -Refer to Table 9-1.If this firm is producing 1250 mousetraps,its total revenue is ,its average revenue is and its marginal revenue is .