Completed 0 out of 30ResourcesSubmQuestion 6 of 30d. An individual firm in a perfectly competitive market must lower its price to sell more of its product.FalseO Truef. In a perfectly competitive market, average revenue is equal to the market price.FalseTruee. In a perfectly competitive market, marginal revenue is equal to the market price.O FalseTrue46°F近 ResourcesSubmit AllQuestion 6 of 30Indicate whether each of the statements below about a perfectly competitive market is true or false.a. In general, the market demand curve in a perfectly competitive market is perfectly elastic.TrueFalseb. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve.TrueO False46°Fa

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d. An individual firm in a perfectly competitive market must lower its price to sell more of its product. O False O True

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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b. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve. False True
The graph shows costs for a perfectly competitive market for frying pans. Suppose that: A= $68, B= $65, C = $46, D= $26, E = 27, F= 38, and G = 64. ABC Â D Price $ OExit 11 Ar what price and quantity will a firm produce in this market? Quantity =$ Enter 11 11 EFG 1. Will the firm open or shut down? Copen OShutdown If this graph is representative of firms in this market, will firms exit or enter the market? 4.
What are the three conditions for a market to be perfectly competitive? For a market to be perfectly competitive, there must be A. many buyers and sellers, with all firms selling identical products, and no barriers to new firms entering the market. B. many buyers and nothingsellers, with all firms selling identical products, and substantial barriers to new firms entering the market. C. many buyers and sellers, with firms selling similar but not identical products, with low barriers to new firms entering the market. D. many buyers and one seller, with the firm producing a product that has no close substitutes, and barriers to new firms entering the market.
Suppose a firm is in a perfectly competitive market. 10 Price 9- 8 4.5³ 3.5 MC ATC AVC 123 4 5 6 7 8 Quantity Suppose currently price is $6, what will happen in the long run? O Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. O Individual firms will earn positive economic profits for now, which will entice other firms to enter the industry in the long run. O Individual firms will earn negative economic profits for now, which will cause some firms to exit the industry in the long run. O Because the price is below the firm's average variable costs, the firms will shut down.
A perfectly competitive firm will be interested in producing a positive output only when the price of its product exceeds its ______. a. AFCmin b. AVCmin c.MCmin d.ATCmin
The figures below show (on the left) two possible demand curves and (on the right) two possible supply curves in the perfectly competitive hamburger market. Price per hamburger 0 A B D₂ D₁ Hamburgers per month Price per hamburger 0 Select one: a. Movement along D₁ from Point A to Point B. b. Demand shifts from D₁ to D₂. F c. Movement along S₁ from Point F to Point G. d. Demand shifts from D₂ to D₁. G Hamburgers per month Assume that people consume either hamburgers or hot dogs. What will be the result of a decrease in the price of hot dogs? Hint: Are hamburgers and hotdogs complements or substitutes? S₂ S₁
What is a price taker? A price taker is A. a firm with a perfectly inelastic demand curve. B. a firm that has the ability to charge a price greater than marginal cost. C. a firm that is unable to affect the market price. D. a firm that does not seek to maximize profits. E. a firm with a downward-sloping demand curve. When are firms likely to be price takers? A firm is likely to be a price taker when A. it has market power. B. firms in the industry collude. C. it sells a differentiated product. D. it represents a small fraction of the total market. E. barriers to entry are substantial.
The table provides data on a market demand schedule (top two rows) and a firm's average and marginal cost schedules (bottom four rows). 1. What is the firm's shutdown point? A firm will stop producing an output in the short run when the market price of the good is O A. equals MC B. equals ATC C. below minimum ATC D. below minimum AVC This firm's shutdown point is at a market price of $ per unit and its profit-maximizing output is units. Price P ($) Quantity Firm's output MC ($) ATC ($) AVC ($) 24 20 16 12 8 4 3,000 4,000 5,000 6,000 7,000 8,000 1 2 3 4 5 6 unit units units units units units 11.00 11.13 12.00 13.63 16.00 19.13 13.50 12.25 12.00 12.19 12.70 13.50 11.63 12.25 13.13 11.25 11.13 11.25
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Which is an example of an almost perfectly competitive market? O the market in licensed physical therapy services O the antique furniture market O the market in pain medications the stock market the National Hockey League
er 11 i Suppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. Now assume that an increase in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price will be Multiple Choice OO O the same as the initial equilibrium price, but the new industry output will be greater than the original output. greater than the initial price, and the new industry output will be greater than the original output. less than the initial price, but the new industry output will be greater than the original output. the same as the initial equilibrium price, and the industry output will remain unchanged. 23 11,229 X OCT all Z A
20 12 10 0 MC ATC -MR 10 Quantity (units) Figure 11.4.1 Refer to Figure 11.4.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run, market O supply will decrease. demand will decrease. O supply and market demand will decrease. supply will increase. O demand will increase.