Question 1

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

Accepted Answer

The answer of 
-The above figure shows a perfectly competitive...

Question 2

Suppose that marginal revenue for a perfectly competitive firm is $20 .When the firm produces 10 units,its marginal cost is $20,its average total cost is $22,and its average variable cost is $17.Then to maximize its profit in the short run,the firm

Accepted Answer

Since the firm's marginal cost equals its marginal revenue at 10 units, it is maximizing profit by producing at this level. However, because the average total cost ($22) is higher than the price ($20, which equals marginal revenue in perfect competition), the firm incurs a loss. The loss per unit is $2 ($22 - $20), and for 10 units, this totals a $20 loss. Shutting down is not the best option because the firm's price is above its average variable cost ($17), meaning it can cover its variable costs and contribute to fixed costs, minimizing losses compared to shutting down.

Question 3

Peter's Pencils is a perfectly competitive company producing pencils.Suppose Peter is producing 1,000 pencils an hour.If the total cost of 1,000 pencils is $500,the market price per pencil is $2,and the marginal cost is $2,then Peter

Accepted Answer

Since Peter is producing in a perfectly competitive market, the market price is equal to the marginal revenue. Thus, the marginal revenue is $2 per pencil. Since the marginal cost is also $2 per pencil, Peter is producing a profit-maximizing output level. 
Given that the total cost of producing 1,000 pencils is $500 and each pencil sells for $2, Peter's revenue is $2,000. Therefore, his profit is $2,000 - $500 = $1,500. Consequently, Peter is maximizing his profit and making an economic profit.

Question 4

For a perfectly competitive rancher in Wyoming,if the price does not change,an economic profit could turn into an economic loss if the

Accepted Answer

If the average total cost curve shifts upward, the rancher's cost of production will increase, and if the price remains the same, the rancher will no longer be earning economic profit, but will instead incur an economic loss.

Question 5

A perfectly competitive firm is producing 50 units of output,which it sells at the market price of $23 per unit.The firm's average total cost is $20.What is the firm's total revenue?

Accepted Answer

The firm's total revenue is calculated by multiplying the market price by the quantity of output, so Total Revenue = Price x Quantity = ($23 per unit) x (50 units) = $1,150.

Question 6

-The above figure shows a perfectly competitive firm.If the market price is $15 per unit,the firm

Accepted Answer

In a perfectly competitive market, if the market price is above the average variable cost but below the average total cost, the firm will continue to produce in the short run to cover some of its fixed costs, even though it incurs an economic loss. This is because by producing, the firm can cover its variable costs and contribute to fixed costs, minimizing losses compared to shutting down immediately.

Question 7

For a perfectly competitive syrup producer whose average total cost curve does not change,an economic profit could turn into an economic loss if the

Accepted Answer

If the market demand for syrup decreases, the price of syrup will fall and the producer will have to sell at a lower price. This will reduce the revenue of the producer, and if the revenue falls below the average total cost, the producer will incur losses.

Question 8

-The above figure shows a perfectly competitive firm.If the market price is $15,the firm

Accepted Answer

When the market price is above a firm's average total cost (ATC), the firm is making an economic profit. Since the question implies a price of $15, which is above the firm's ATC at its profit-maximizing output, the firm is making an economic profit.

Question 9

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,the firm is

Accepted Answer

The answer of 
-Computer memory chips are produced on wafers,each...

Question 10

-The above figure shows a perfectly competitive firm.If the market price is $5,the firm

Accepted Answer

The answer of 
-The above figure shows a perfectly competitive...

Question 11

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.This firm will produce as long as the market price of a wafer is above

Accepted Answer

In a perfectly competitive market, a firm will continue to produce as long as the market price covers the variable costs. The choice that represents the lowest level of costs that must be covered for production to take place is $1,300, which likely represents the total variable costs. Fixed costs do not need to be covered in the short run for production to continue.

Question 12

If a perfectly competitive firm's average total cost is less than the price,then the firm

Accepted Answer

If a perfectly competitive firm's average total cost is less than the price, then the firm is making an economic profit. This is because the firm's revenue is greater than its costs.

Question 13

-The above figure shows a perfectly competitive firm.If the market price is $20 per unit,the firm

Accepted Answer

The answer of 
-The above figure shows a perfectly competitive...

Question 14

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's total cost?

Accepted Answer

The firm's total cost can be calculated by multiplying the average total cost by the quantity of output. So, $20 (average total cost) * 50 (units of output) = $1,000.

Question 15

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's economic profit?

Accepted Answer

Economic profit is calculated as (Price - Average Total Cost) * Quantity. Here, it is ($23 - $20) * 50 = $3 * 50 = $150.

Question 16

A perfectly competitive firm should shut down in the short-run if price falls below the minimum of

Accepted Answer

In the short-run, a perfectly competitive firm should shut down if price falls below its average variable costs. This is because the firm would not even be able to cover its variable costs, let alone its fixed costs, and would be better off shutting down operations temporarily. Shutting down would minimize losses and allow the firm to reevaluate its production decisions. Thus, the best choice is E, as it is the only option that considers the firm's variable costs.

Question 17

-The above figure shows a perfectly competitive firm.If the market price is $10,the firm

Accepted Answer

In a perfectly competitive market, if a firm's price equals its average total cost (ATC), it is making zero economic profit. This is because all costs, including opportunity costs, are covered, but there is no additional profit over and above this.

Question 18

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,how many wafers will the firm produce?

Accepted Answer

In a perfectly competitive market, firms will produce up to the point where the price equals the marginal cost (MC). Without the table, we can't see the exact numbers, but given the options and the market price of $2,400, the firm will produce the number of wafers where the MC is closest to but not exceeding $2,400. This ensures the firm maximizes profit by not producing additional units that cost more to make than they can sell for.

Question 19

If the market price is $50 per unit for a good produced in a perfectly competitive market and the firm's average total cost is $52,then the firm

Accepted Answer

The firm's average total cost of $52 is greater than the market price of $50, indicating that the firm is not covering all of its costs from sales revenue alone. Thus, the firm incurs an economic loss of $2 per unit.

Question 20

-The above figure shows a perfectly competitive firm.If the market price is more than $20 per unit,the firm

Accepted Answer

If the market price is more than $20 per unit, the firm will stay open to produce and will make an economic profit because it is covering all its variable and fixed costs and making additional revenue above those costs.

Quiz 15: Perfect Competition

-The above figure shows a perfectly competitive firm.If the market price is $5 per unit,the firm

Suppose that marginal revenue for a perfectly competitive firm is $20 .When the firm produces 10 units,its marginal cost is $20,its average total cost is $22,and its average variable cost is $17.Then to maximize its profit in the short run,the firm

Peter's Pencils is a perfectly competitive company producing pencils.Suppose Peter is producing 1,000 pencils an hour.If the total cost of 1,000 pencils is $500,the market price per pencil is $2,and the marginal cost is $2,then Peter

For a perfectly competitive rancher in Wyoming,if the price does not change,an economic profit could turn into an economic loss if the

A perfectly competitive firm is producing 50 units of output,which it sells at the market price of $23 per unit.The firm's average total cost is $20.What is the firm's total revenue?

-The above figure shows a perfectly competitive firm.If the market price is $15 per unit,the firm

For a perfectly competitive syrup producer whose average total cost curve does not change,an economic profit could turn into an economic loss if the

-The above figure shows a perfectly competitive firm.If the market price is $15,the firm

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,the firm is

-The above figure shows a perfectly competitive firm.If the market price is $5,the firm

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.This firm will produce as long as the market price of a wafer is above

If a perfectly competitive firm's average total cost is less than the price,then the firm

-The above figure shows a perfectly competitive firm.If the market price is $20 per unit,the firm

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's total cost?

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's economic profit?

A perfectly competitive firm should shut down in the short-run if price falls below the minimum of

-The above figure shows a perfectly competitive firm.If the market price is $10,the firm

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.If the market price of a wafer is $2,400 dollars,how many wafers will the firm produce?

If the market price is $50 per unit for a good produced in a perfectly competitive market and the firm's average total cost is $52,then the firm

-The above figure shows a perfectly competitive firm.If the market price is more than $20 per unit,the firm