It is less important for firms that sell commodities to have a competitive advantage. O a. True, a competitive advantage is not useful for commodity firms because they are usually a monopoly with no competitors O b. True, the most important factor for commodity firms is lower prices O c. False O d. True, the most important factor for commodity firms is lower costs O e. True, the most important factors for commodity firms are both lower costs and lower prices

It is less important for firms that sell commodities to have a competitive advantage. O a. True, a competitive advantage is not useful for commodity firms because they are usually a monopoly with no competitors O b. True, the most important factor for commodity firms is lower prices O c. False O d. True, the most important factor for commodity firms is lower costs O e. True, the most important factors for commodity firms are both lower costs and lower prices

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following statements is TRUE? O A. Consumer surplus is higher under a single-price monopoly than it is under a perfectly price-discriminating monopoly. B. Joan adds one more employee to her construction company. The additional output produced by this employee represents the average product of this employee. O C. Lawn mowing is a perfectly competitive industry. Alex's Lawn-Mowing Service should shut down in the short run whenever his profits are negative. O D. Lawn mowing is a perfectly competitive industry. Alex's Lawn-Mowing Service should close if Alex expects his long-run economic profits to equal zero. Reset Selection
Economic efficiency is O A. a market outcome in which the marginal benefit to consumers of the last unit produced is greater than its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum. O B. a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum. O C. a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is not at a maximum. O D. a government outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum.
2. Suppose that the market for wind chimes is a competitive market. The following graph shows the daily cost curves of a particular firm operating in this PRICE (Dollars per wind chime) 40 36 32 28 24 20 16 2 8 4 0 0 MC 2 ATC AVC 6 4 8 QUANTITY (Thousands of wind chimes per day) + 10 12 14 16 18 20 market: a) In short run, at a market price of $26 per wind chime, how much will firm choose to produce per day? How do you know? b) If the market price is $26 in the short run, and the firm chooses to produce the quantity you obtained in question (a), indicate the area that represents firm's profit or loss in short run on the graph. c) What is this firm's shutdown price, that is the price below which it is optimal for the firm to shut down in short run? d) long run, all firms can enter and exit the market, and all entram the same costs as above. As this mark
Supply curves are typically "positively sloped." The meaning conveyed by any such curve is that: O B. the lower the price, the larger the supply that consumers are prepared to buy. O A. any increase in costs of production will result in a movement up along the supply curve. O E. all items A to D. O C. the higher the price, the larger the quantity suppliers will wish to sell. O D. the larger the quantity suppliers have to sell, the lower the price they will have to quote in order to dispose of it.
For a firm in a perfectly competitive output market (as covered in Chapter 8), price per unit of the good is equal to marginal revenue. This relationship between price and marginal revenue is due to which of the following assumptions about a firm in a perfectly competitive output market: O a. Firms are price takers. O b. Downward-sloping market demand curve. O c. No barriers to entry. O d. Upward-sloping market supply curve.
In a competitive market with free entry and exit from the market a permanent rise in demand will lead to Select one or more: O a. excess profits being made in the short run (before new firms can enter) O b. entry by new firms O c. a permanent rise in prices O d. normal profits being made in the long-run
Assume that the market for house cleaning is perfectly competitive. If a single firm cleans 22 apartments per week, and there are 99 identical firms in the market, how many markets are getting cleaned weekly? O a less than 2178 because demand slopes down. O b.4356 Oc 2614 O d. 2178 O e. it is impossible to say anything about the market output based on information about single firms.
Firms X and firm Y are maximizing profits. At their respective profit-maximizing price, Firm X's own-price elasticity is -2 and Firm Y's own-price elasticity is -3. Which statement is correct? O The share of markup in the optimal price (Lerner index) for firm X is equal to 50% O Firm X is a price taker O Everything else held constant, if firm Y increases its price it will lead to an increase in its revenue O Firm X's consumers are more price sensitive than firm Y's consumers O Firm Y can charge a higher markup than firm X
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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
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Which of the following shift the quinoa supply curve to the right? a. The world-wide outbreak of a deadly virus which makes the transportation of quinoa more difficult. O b. Consumers become more aware of the health benefits of Quinoa. O c. Major quinoa farmers in the world form a cartel. O d. Quinoa farms adopt a better production technology and reduces its marginal cost.