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- In perfect competition, a firm maximizes profit in the short run by deciding Select one: O a. whether or not to enter a market O b. how much output to produce O c. what price to charge O d. how much capital to useA market structure is defined in terms of the number and sizes of buyers and sellers on a market, the type of product traded on the market, and etc. If a market is perfectly competitive, the demand curve facing a perfectly competitive firm must be; a. downward-sloping and more flat than the market demand curve. O b. downward-sloping and less flat than the market demand curve. O C. the same as the market demand curve. O d. perfectly horizontal.Consider the following data facing a perfectly competitive firm: price = $20, quantity of output produced = 600 units, average total cost = $16, average fixed cost = $12, and marginal cost = $22. This firm should O a. increase output to maximize profit. O b. not change output in the short run since profit is already maximized. O c. shut down immediately. O d. reduce output but not shut down in the short run to maximize profit. O e. raise price above $20 to maximize profit in the short run.
- What are the three conditions for a market to be perfectly competitive? For a market to be perfectly competitive, there must be O A. many buyers and a small number of firms that compete, selling identical products, and barriers to new firms entering the market. O B. many buyers and one seller, with the firm producing a product that has no close substitutes, and barriers to new firms entering the market. OC. many buyers and a few sellers, with all firms selling identical products, and no barriers to new firms entering the market. O D. many buyers and sellers, with all firms selling identical products, and no barriers to new firms entering the market. O E. many buyers and sellers, with firms selling similar but not identical products, with low barriers new firms entering the market.In a perfectly competitive market, there are firms, all selling products. Select one: O a several large; differentiated O b. several large; nearly identical O c. many small; differentiated O d. many small; nearly identicalA perfectly competitive firm is breaking even. In the short run it should In the long run it should O a. shut down; expand O b. produce where MC = MR; leave the industry Oc produce where MC = MR; keep the same production level O d. shut down: exit the industry Corn is produced in a perfectly competitive market. The demand for ethanol decreases. This will cause the individual corn farmer's marginal revenue to maximizing level of output to and their profit- Oa. decrease; increase Ob. increase; increase O c. increase: decrease O d. decrease; decrease
- Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price. Assuming price exceeds average variable cost, to maximize profits Cathy's should O a. stop producing since it is earning a loss. O b. decrease their output. Oc make no adjustments as they are already maximizing their profits. Od. increase their output. Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5.000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces more, the costs of Kyle's factory will exceed those of Stan's factory. Ob. more, their costs will be equal. less, the costs of Kyle's factory will exceed those of Stan's factory. Od. less, their costs will be equal. If a firm is producing where…In perfect competition, what is the relationship between the demand for the firm's output and the market demand? In a perfectly competitive market, the market demand is O A. perfectly elastic; perfectly elastic O B. shown by a downward-sloping curve; perfectly elastic O C. shown by a downward-sloping curve; shown by a downward-sloping curve O D. perfectly elastic; shown by a downward-sloping curve and the demand faced by the individual firm is C* 00 T %24 Question 6 The profit-maximizing rule states that a perfectly competitive firm: O A. should stop production as soon as it experiences diminishing marginal returns. O B. should produce that level of output at which MR = MC. O C. should not produce a unit if its MC < MR. O D.produces too much if MR = MC. A Moving to another question will save this response. MacBook Pro DD F7 OOO F1 F2 F3 F5 4 2. 3. 8. R. B command
- Because perfectly competitive firms are price takers, a permanent increase in the market demand does not change the price of the product in either the short run or long run. O A. True O B. FalseSuppose Cindy's Glove Factory operates in a perfectly competitive market and is producing its profit- maximizing level of output. Suppose further that at this level of production its average total cost of producing mittens is $18, average variable cost is $16, and marginal cost is $14. Cindy should Select one: OA decrease production since it will increase her economic profit. O B. continue to produce since she is earning a positive economic profit. OC. increase production since it will increase her economic profit. O D. continue to produce since she is covering some of her fixed costs. O E. shut down immediately.QUESTION 19 If your total profit is 8000 dirhams and your total revenue is 10000 dirhams. How much is your total cost? O a. 3000 dirhams. O b. 1500 dirhams. c. 2000 dirhams. O d. 1000 dirhams. QUESTION 20 In a perfect competitive market, companies will make zero profits in the long run because O a. Too much competition. O b. They do not know how to produce. O c. Little competition. O d. None of the above is correct. QUESTION 21 A decrease in price will increase consumer welfare or consumer surplus due to a. New consumers paying a higher price, and old consumers leaving the market. b. New consumers paying a lower price, and old consumers leaving the market. O c. Old consumers paying a higher price, and new consumers entering into the market. O d. Old consumers paying a lower price, and new consumers entering into the market.