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 isO A. perfectly elastic; perfectly elasticO B.shown by a downward-sloping curve; perfectly elasticO C.shown by a downward-sloping curve; shown by a downward-sloping curveO D. perfectly elastic; shown by a downward-sloping curveand the demand faced by the individual firm isC

Perfect competition is an economic model of a market in which there are many buyers and sellers, all…

Answered: In a perfectly competitive market, the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What is a price taker? A price taker is O A. a firm with a downward-sloping demand curve. O B. a firm that is unable to affect the market price. Oc. a firm with a perfectly inelastic demand curve. O D. a firm that has the ability to charge price greater than marginal cost. O E. a firm that does not seek to maximize profits. When are firms likely to be price takers? A firm is likely to be a price taker when O A. it sells a differentiated product. O B. barriers to entry are substantial. OC. it has market power. O D. it represents a small fraction of the total market,. O E. firms in the industry collude.
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
Which of the following best explains why a firm in a competitive price-taker market must take the price determined in the market? The short-run average total costs of firms that are price takers will be constant. O If a price taker increased its price, consumers would buy from other suppliers. O Firms in a price-taker market will have to advertise in order to increase sales. There are no good substitutes for the product supplied by a firm that is a price taker.
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
PRICE A பயடு X Figure 16-8 B T LL L QUANTITY M MC ATC Demand MR Refer to Figure 16-8. Which of the following best describes the profit-maximizing outcome for the firm depicted her a. This firm is in long run equilibrium and will continue to earn zero profit. b. This firm is earning zero profit in the short run, but will earn a positive profit in the long run. c. This firm is incurring a short-run loss, but will earn zero profit in the long run. d. This firm is earning a short-run profit, but will earn zero profit in the long run.
The short-run elasticity of supply curve is steep because O A. diminishing marginal returns restrict output in the short run. OB. production facilities have a fixed capacity in the short run. OC. new firms enter the market with new production facilities. OD. of both A and B. SURU O E. All of the above.
If a graph is used to compare total revenue and total cost of a perfectly competitive firm, then the horizontal axis of the graph will represent the and the vertical axis will represent OA. price, measured in dollars; quantity of goods produced O B. total costs measured in dollars; quantity of goods produced O C. quantity produced; both total revenue and total costs, measured in dollars. O D. quantity produced; total revenue and total variable costs, measured in dollars.
Suppose a firm has a fixed cost of F > 0 and a constant marginal cost of c> 0. What can we infer about the short run and long run supply curves? Both the short run and long run supply curves will be downward sloping. Both the short run and long run supply curves will be upward sloping. The short run supply curve will be upward sloping, but the long run supply curve will be downward sloping. O The short run and long run supply curves will be identical. O None of the above.
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…
If a firm's demand curve is perfectly elastic, then at the profit-maximizing level of output O a. P = MR = MC. O b. P MR > MC. O d. P>0 and MR = 0. %3D
Which of the following best describes the short-run supply curve for an individual perfectly competitive firm? Select one: a. It is the vertical axis at prices less than minimum average variable cost and is the firm's marginal cost curve at prices above minimum average variable cost. Ob. It is the upward-sloping part of the firm's marginal cost curve. O c. It is the firm's marginal cost curve. Od. It is the vertical axis at prices less than minimum average total cost and is the firm's marginal cost curve at prices above minimum average total cost.
A firm in a perfectly competitive market has no control over price because: Select one: of O a. The government imposes price ceiling on the products produced in perfectly competitive industries O b. There are barriers to entry into the industry Oc. The market demand for products produced in perfectly competitive industries is perfectly elastic *O d. Every firm's product is a perfect substitute for every other firm's product, and there are very large number of firms in the industry

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