question
Which of the following are considered to be the four basic market structures?
answer
Pure competition
Monopolistic competition
Pure monopoly
Oligopoly
Monopolistic competition
Pure monopoly
Oligopoly
question
Pure ______ involves a very large number of firms.
answer
competition
question
Which of the following features occur in a purely competitive market?
answer
Sales in both national and international markets.
Many independently acting sellers
Many independently acting sellers
question
Economists group industries into distinct market structures.
answer
4
question
Which of the following best describes pure competition?
answer
An industry involving a very large number of firms producing identical products and in which new firms can enter or exit the industry very easily.
question
Which of the following best describes a pure monopoly?
answer
One firm selling a single unique product, where entry of additional firms is blocked and there is considerable control over price
question
______ is relatively rare in the real world, although this market model is highly ______ to several industries.
answer
Pure competition; relevant
question
Which of the following best describes the situation of a price-taking firm?
A price-taking firm is one of a ______ number of firms producing a product that is identical to that of every other firm in the industry and providing ______ of total market supply.
A price-taking firm is one of a ______ number of firms producing a product that is identical to that of every other firm in the industry and providing ______ of total market supply.
answer
large; only a fraction
question
A basic feature of the purely competitive market is the presence of ______.
answer
a large number of sellers
question
Which of the following explains why a purely competitive firm is a price taker?
answer
A purely competitive firm offers only a negligible fraction of total market supply and therefore must accept the price determined by the market
question
A firm operating in a purely competitive market is a price taker because it ______.
answer
cannot change the market price, it can only adjust to it
question
Which factors illustrate that the demand curve for a purely competitive firm is perfectly elastic?
answer
The firm does not need to lower its price to increase its sales volume.
The firm cannot obtain a higher price by restricting its output.
The firm cannot obtain a higher price by restricting its output.
question
Which of the following best describes pure competition?
answer
An industry involving a very large number of firms producing identical products and in which new firms can enter or exit the industry very easily.
question
A purely competitive firm is a price
answer
taker
question
Which of the following best describes the situation of a price-taking firm?
A price-taking firm is one of a ______ number of firms producing a product that is identical to that of every other firm in the industry and providing ______ of total market supply.
A price-taking firm is one of a ______ number of firms producing a product that is identical to that of every other firm in the industry and providing ______ of total market supply.
answer
large; only a fraction
question
A basic feature of the purely competitive market is the presence of ______.
answer
a large number of sellers
question
In a perfectly competitive market, the demand curve for an individual firm is perfectly at the market price.
answer
elastic
question
In a purely competitive market, price per unit to a buyer equals:
answer
average revenue to a seller
question
Which of the following explains why a purely competitive firm is a price taker?
answer
A purely competitive firm offers only a negligible fraction of total market supply and therefore must accept the price determined by the market
question
The change in total revenue that results from selling one more unit of output is called revenue.
answer
marginal
question
A purely competitive firm's demand schedule is equal to which of the following?
answer
marginal revenue
average revenue
average revenue
question
In the short run, a purely competitive firm can maximize its economic profit (or minimize its loss) by adjusting its
answer
output
question
Which of the following best describes the economic break-even point?
answer
The point where total revenue covers all costs, but there is no economic profit.
question
In a purely competitive market, a firm's demand schedule is also its - schedule.
answer
average; revenue
question
In pure competition, if the first unit of output sold increases total revenue from $0 to $131, marginal revenue for that unit is $131. If the second unit sold increases total revenue from $131 to $262, marginal revenue is again $131. The third unit sold increases total revenue to $______ and marginal revenue is now $______.
answer
393; 131
question
A(n) competitive firm's average-revenue schedule is also known as its demand schedule.
answer
pure
question
A purely competitive firm can maximize its economic profit (or minimize its loss) by adjusting only its output because it ______.
answer
is a price taker
question
From an economic standpoint, the break-even point is the level of output at which a firm makes a(n) ______ profit.
answer
normal
question
In a purely competitive market, price per unit to a buyer equals:
answer
average revenue to a seller
question
The change in total revenue that results from selling one more unit of output is called revenue.
answer
marginal
question
Which of the following best describes marginal revenue?
answer
The revenue that an additional unit of output contributes to total revenue
question
Which of the following best describes the economic break-even point?
answer
The point where total revenue covers all costs, but there is no economic profit.
question
The MR = MC rule is known as the:
answer
profit-maximizing rule
question
Which of the following is a method of calculating economic profit in pure competition?
answer
Price minus average total cost multiplied by quantity
question
revenue is the additional revenue that an additional unit ofBlank 2Blank 2 blank would add to total revenue.
answer
Marginal;output
question
The profit-maximizing rule of MR=MC states that in the short run, the firm will maximize profit or minimize loss by producing the output for which marginal revenue ______ marginal cost.
answer
equals
question
In pure competition, to calculate economic profit, we first calculate the difference between and average total cost and then multiply it by output.
answer
price
question
The quantity of a product supplied by a firm in pure competition should _____ as long as price rises.
answer
increase
question
If price is below a firm's minimum average Blank 1, cost the firm will not operate.
answer
Variable
question
A firm should always stop producing if its average ______ cost is ______ price.
answer
variable; greater than
question
What is the firm's most likely response if price is exactly equal to minimum average variable cost?
answer
Indifference to producing or shutting down
question
...
answer
rice exceeds minimum average variable cost but is less than average total cost
question
Multiplying product price by output reveals which of the following?
answer
Total revenue
question
Which of the following factors will alter costs and shift the marginal cost or short-run supply curve to a new location?
answer
Technology
Prices of variable inputs
Prices of variable inputs
question
What is the firm's most likely response if price is exactly equal to minimum average variable cost?
answer
Indifference to producing or shutting down
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