Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 15, Problem 8MCQ
To determine
Among the given options, selecting the option that does not fit for
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Which of the following statements is true ?
A. A firm should increase quantity as long as price is higher than average cost, regardless of the marginal cost
B. A firm should increase quantity as long as price is greater than marginal cost
C. A firm should increase quantity as long as average cost is greater than price
D. A firm should increase quantity as long as marginal cost is greater than price
The following statements are true in a perfect market except which one?
A. Resources are allocated efficiently because of competition
B. Price is equal to marginal costs C. Normal profit made in the long run
D. Firms do not operate at maximum efficiency
In perfect competition_______.
Select one:
a. demand for the good or service is small relative to the minimum efficient scale of a single producer.
b. the size of demand for the good or service relative to the minimum efficient scale of a single producer does not affect competition.
c. demand for the good or service can be small relative to the minimum efficient scale of a single producer as long as the goods or services are not identical.
d. demand for the good or service is large relative to the minimum efficient scale of a single producer.
Chapter 15 Solutions
Foundations of Economics (8th Edition)
Ch. 15 - Prob. 1SPPACh. 15 - Prob. 2SPPACh. 15 - Prob. 3SPPACh. 15 - Prob. 4SPPACh. 15 - Prob. 5SPPACh. 15 - Prob. 6SPPACh. 15 - Prob. 7SPPACh. 15 - Prob. 8SPPACh. 15 - Prob. 9SPPACh. 15 - Prob. 10SPPA
Ch. 15 - Prob. 11SPPACh. 15 - Prob. 1IAPACh. 15 - Prob. 2IAPACh. 15 - Prob. 3IAPACh. 15 - Prob. 4IAPACh. 15 - Prob. 5IAPACh. 15 - Prob. 6IAPACh. 15 - Prob. 7IAPACh. 15 - Prob. 8IAPACh. 15 - Prob. 9IAPACh. 15 - Prob. 10IAPACh. 15 - Prob. 11IAPACh. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 6MCQCh. 15 - Prob. 7MCQCh. 15 - Prob. 8MCQ
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- In a market characterized by perfect competition, what happens to price and quantity when new firms enter the market? A. Price increases, quantity increases B. Price decreases, quantity decreases C. Price remains the same, quantity increases D. Price decreases, quantity increasesarrow_forward1. Why is water, which is essential to life, so cheap, while diamonds, which are not essential to life, so expensive? Explain your answer using total utility (TU) and marginal utility (MU). 2. Discuss the advantages of perfect competition. 3. What is the shape and elasticity of the demand curve facing a perfectly competitive firm? Why? 4. How does the firm determine how much to produce in the short run?arrow_forwardSuppose the equilibrium price of a good in a perfectly competitive market is $15. A firm in the market decides to charge $20 for the good. Which of the following will happen? a. The firm's profit will increase. b. The firm will capture the entire market. c. The firm will not be able to sell any output. d. The firm's revenue will increase.arrow_forward
- In perfect competition, Select one: a. the market demand for the good is perfectly elastic but the demand for the output of one firm is not perfectly elastic. b. the market demand for the good is not perfectly elastic but the demand for the output of one firm is perfectly elastic. c. both the market demand for the good and the demand for the output of one firm are perfectly elastic. d. neither the market demand for the good nor the demand for the output of one firm is perfectly elastic.arrow_forwardMultiple choice - microeconomics 43) What will entry into a market by new firms do? A. It will increase the price of the good B. It will increase profits of existing firms C. It will increase the costs of existing firms D. It will increase the supply of the good. 42) What is one consideration that applies to the analysis of a market over the long run but not to the analysis over the short run? A. changes in firms’ cost structures B. changes in the numbers of firms in the market C. changes in the price of the product D. changes in firms’ profitsarrow_forwardThe apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 per cent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit. In the long run, the ________. Select one: A. increases; zero; price of apples will return to its original level B. increases; zero; orchards will be replanted and economic profit will return to zero C. increases; positive; orchards will be replanted and economic profit will return to zero D. remains the same; zero; orchards will be replanted and growers will make normal profitsarrow_forward
- 1. The market for manicures and other nail treatments is very competitive. How would the following developments affect the number of nail treatments that a typical nail salon wants to supply in the short run? a. Heightened concern about their appearance causes people to want more manicures at a given price. b. The government requires all nail salons to pay a new yearly licensing fee to operate. c. Worse job prospects elsewhere in the economy cause more people to want to become manicurists, causing the wages of manicurists to fall.arrow_forwardWhich market offers higher consumer surplus and why? The perfectly competitive firm or the monopoly firm?arrow_forwardThe 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 _________. A. below minimum AVC B. equals ATC C. below minimum ATC D. equals MC This firm's shutdown point is at a market price of $ ? per unit and its profit-maximizing output is ? units.arrow_forward
- In a perfectly competitive market Select one: a. each firm takes the good's price as given to it by the market. b. each firm sets its own price so that it is different from its competitors. c. an economic profit is certain. d. consumers are persuaded by advertising.arrow_forwardChoose the one alternative that best that answers the question. Assume the market for organic produce is perfectly competitive. All else being equal, as more farmers choose to produce and sell organic produce, in the long-run, Select one: a. The equilibrium price is likely to increase, and profits are likely to remain unchanged. b. The equilibrium price is likely to remain unchanged, and profits are likely to increase. c. The equilibrium price is likely to decrease, and profits are likely to decrease. d. The equilibrium price is likely to increase, and profits are likely to increase. e. Both the equilibrium price and quantity are likely to remain unchanged.arrow_forwardIn perfect competition market the goods which are sold are ___________ in naturearrow_forward
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