Write C for a purely competitive market, M for a monopolist market/industry, or F if neither one. 1. Each seller takes the role of a price taker. 2. Shutdown point is when determined selling price is less than a firm's AVC. 3. Firm maximizes profit when determined selling price is less than a firm's AVC. 4. In the long run, all costs become variable. 5. No good substitutes are available for the good or service the only firm offers. 6. Break-even position is when marginal cost is equal to AVC. 7. Only more than normal profits can be earned by the farms. 8. A firm's supply curve is its variable cost curve. 9. Profit is maximized at an output level where MR is equal to MC. 10. The firm and the industry are one. 11. Confined to a geographic area and regulated by a government agency 12. Faces a downward sloping demand curve and must maximize profits given the market demand and its cost of production. 13. No advertising cost 14. Affects no other firms with his actions and the actions of other firms do not affect him 15. If selling price ice is higher than average cost, there is zero profit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Write C for a purely competitive market, M for a monopolist market/industry, or F if neither one. ____________1. Each seller takes the role of a price taker. ____________2. Shutdown point is when determined selling price is less than a firm's AVC. ____________3. Firm maximizes profit when determined selling price is less than a firm's AVC. ____________4. In the long run, all costs become variable. ____________5. No good substitutes are available for the good or service the only firm offers. ____________ 6. Break-even position is when marginal cost is equal to AVC. ____________7. Only more than normal profits can be earned by the farms. ____________8. A firm's supply curve is its variable cost curve. ____________9. Profit is maximized at an output level where MR is equal to MC. ____________10. The firm and the industry are one. ____________11. Confined to a geographic area and regulated by a government agency ____________12. Faces a downward sloping demand curve and must maximize profits given the market demand and its cost of production. ____________13. No advertising cost ____________14. Affects no other firms with his actions and the actions of other firms do not affect him ____________15. If selling price ice is higher than average cost, there is zero profit.

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