Assignment 6 - Assignment Essays

question

Refer to the below diagram. At P3, this firm will:

answer

produce 40 units and incur a loss

question

Refer to Figure 14-14. If the market starts in equilibrium at point Z in panel (b), a decrease in demand will ultimately lead to

answer

fewer firms in the market

question

Mrs. Smith operates a business in a competitive market. The current market price is $8.50. At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25. Mrs. Smith should

answer

continue to operate in both the short run and long run

question

A firm in a competitive market has the following cost structure:

answer

question

Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes per month. Her monthly total revenue is $5,000. The marginal cost of making a wedding cake is $200. In order to maximize profits, Laura should

answer

make more than 20 wedding cakes per month

question

A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will

answer

rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium

question

By comparing marginal revenue and marginal cost, a firm in a competitive market is able to adjust production to the level that achieves its objective, which we assume to be

answer

maximizing profit

question

A sunk cost is one that

answer

was paid in the past and will not change regardless of the present decision

question

The lowest price at which the firm should produce (as opposed to shutting down) is:

answer

No less than AVC (average variable cost)

question

Refer to the below diagram. At the profit-maximizing output, the firm will realize:

answer

a profit of ABGH

question

Refer to the below diagram. At P4, this firm will:

answer

shut down in the short run

question

If firms are losing money in a purely competitive industry, then in the long run this situation will shift the industry

answer

Supply curve to the left, and the market price will increase

question

Refer to the below diagram. At the profit-maximizing output, total variable cost is equal to:

answer

0CFE

question

Refer to the below diagram for a purely competitive producer. If product price is P3:

answer

economic profits will be zero

question

Refer to Table 14-17. Based upon this information, the profit maximizing output level is

answer

5 units

question

Refer to Figure 14-1. If the market price is $6.30, the firm will earn

answer

zero economic profits in the short run

question

In the transition from the short run to the long run, the number of firms in a competitive industry is

answer

able to adjust to market conditions

question

Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is

answer

$1,600

question

Refer to the below diagram. At the profit-maximizing output, total fixed cost is equal to:

answer

BCFG

question

Refer to the below graphs. Which statement is true?

answer

The firm is experiencing economic losses

question

Refer to the below diagram. At the profit-maximizing output, total revenue will be:

answer

0AHE

question

When price is greater than marginal cost for a firm in a competitive market,

answer

there are opportunities to increase profit by increasing production

question

Refer to the below diagram. This firm will earn a positive profit if product price is:

answer

question

Refer to the below diagram for a purely competitive producer. The firm's short-run supply curve is:

answer

the bcd segment and above on the MC curve

question

Refer to the below graphs. What will happen in the long run to industry supply and the equilibrium price of the product?

answer

S will decrease, P will increase

question

When a certain competitive firm produces and sells 100 units of output, marginal revenue is $80. When the same firm produces and sells 200 units of output, what is average revenue?

answer

$80

question

Refer to the below diagram for a purely competitive producer. The firm will produce at a loss at all prices:

answer

between P2 and P3

question

If the price is $2 in the short run, what will happen in the long run?

answer

Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry

question

If the price is $3.50 in the short run, what will happen in the long run?

answer

Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry

question

When new firms have an incentive to enter a competitive market, their entry will

answer

drive down profits of existing firms in the market

question

Refer to the below diagram. To maximize profit this firm will produce:

answer

E units at price A

question

Mr. Rogers sells colored pencils. The colored-pencil industry is competitive. Mr. Rogers hires a business consultant to analyze his company's financial records. The consultant recommends that Mr. Rogers increase his production. The consultant must have concluded that Mr. Roger's

answer

marginal revenue exceeds his marginal cost

question

The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.

answer

downsloping, perfectly elastic

question

Refer to the below diagram. At P2, this firm will:

answer

produce 44 units and earn only a 0 profit

question

If firms enter a purely competitive industry, then in the long run this change will shift the industry:

answer

Supply curve to the right, and the market price will decrease

question

An individual firm in a perfectly competitive market:

answer

cannot affect market price

question

A purely competitive firm, as shown below, will face what kind of change in profits over the long run, assuming industry demand is constant?

answer

Profits will decrease

question

When a profit-maximizing firm is earning profits, those profits can be identified by

answer

(P - ATC) × Q

question

Using this information, determine the average variable cost (AVC) when Q = 5

answer

question

Suppose the market for wheat is perfectly competitive. Fed up with low prices, a wheat grower in Texas decides he won't take his output to market and, instead, dumps all his wheat into the Red River. What happens to the market price of wheat?

answer

It doesn't change

1 of 40

question

Refer to the below diagram. At P3, this firm will:

answer

produce 40 units and incur a loss

question

Refer to Figure 14-14. If the market starts in equilibrium at point Z in panel (b), a decrease in demand will ultimately lead to

answer

fewer firms in the market

question

answer

continue to operate in both the short run and long run

question

A firm in a competitive market has the following cost structure:

answer

question

answer

make more than 20 wedding cakes per month

question

A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will

answer

rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium

question

By comparing marginal revenue and marginal cost, a firm in a competitive market is able to adjust production to the level that achieves its objective, which we assume to be

answer

maximizing profit

question

A sunk cost is one that

answer

was paid in the past and will not change regardless of the present decision

question

The lowest price at which the firm should produce (as opposed to shutting down) is:

answer

No less than AVC (average variable cost)

question

Refer to the below diagram. At the profit-maximizing output, the firm will realize:

answer

a profit of ABGH

question

Refer to the below diagram. At P4, this firm will:

answer

shut down in the short run

question

If firms are losing money in a purely competitive industry, then in the long run this situation will shift the industry

answer

Supply curve to the left, and the market price will increase

question

Refer to the below diagram. At the profit-maximizing output, total variable cost is equal to:

answer

0CFE

question

Refer to the below diagram for a purely competitive producer. If product price is P3:

answer

economic profits will be zero

question

Refer to Table 14-17. Based upon this information, the profit maximizing output level is

answer

5 units

question

Refer to Figure 14-1. If the market price is $6.30, the firm will earn

answer

zero economic profits in the short run

question

In the transition from the short run to the long run, the number of firms in a competitive industry is

answer

able to adjust to market conditions

question

Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is

answer

$1,600

question

Refer to the below diagram. At the profit-maximizing output, total fixed cost is equal to:

answer

BCFG

question

Refer to the below graphs. Which statement is true?

answer

The firm is experiencing economic losses

question

Refer to the below diagram. At the profit-maximizing output, total revenue will be:

answer

0AHE

question

When price is greater than marginal cost for a firm in a competitive market,

answer

there are opportunities to increase profit by increasing production

question

Refer to the below diagram. This firm will earn a positive profit if product price is:

answer

question

Refer to the below diagram for a purely competitive producer. The firm's short-run supply curve is:

answer

the bcd segment and above on the MC curve

question

Refer to the below graphs. What will happen in the long run to industry supply and the equilibrium price of the product?

answer

S will decrease, P will increase

question

When a certain competitive firm produces and sells 100 units of output, marginal revenue is $80. When the same firm produces and sells 200 units of output, what is average revenue?

answer

$80

question

Refer to the below diagram for a purely competitive producer. The firm will produce at a loss at all prices:

answer

between P2 and P3

question

If the price is $2 in the short run, what will happen in the long run?

answer

Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry

question

If the price is $3.50 in the short run, what will happen in the long run?

answer

Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry

question

When new firms have an incentive to enter a competitive market, their entry will

answer

drive down profits of existing firms in the market

question

Refer to the below diagram. To maximize profit this firm will produce:

answer

E units at price A

question

answer

marginal revenue exceeds his marginal cost

question

The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.

answer

downsloping, perfectly elastic

question

Refer to the below diagram. At P2, this firm will:

answer

produce 44 units and earn only a 0 profit

question

If firms enter a purely competitive industry, then in the long run this change will shift the industry:

answer

Supply curve to the right, and the market price will decrease

question

An individual firm in a perfectly competitive market:

answer

cannot affect market price

question

A purely competitive firm, as shown below, will face what kind of change in profits over the long run, assuming industry demand is constant?

answer

Profits will decrease

question

When a profit-maximizing firm is earning profits, those profits can be identified by

answer

(P - ATC) × Q

question

Using this information, determine the average variable cost (AVC) when Q = 5

answer

question

answer

It doesn't change

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