question
When there is a permanent increase in market demand in constant cost industry, a firm's short-run average total cost curve will what?
answer
remain the same
question
Perfect competition is defined as market structure in which what is true?
answer
-there are many small sellers
-the product is homogenous
-it is very easy for firms to enter or exit the market
-the product is homogenous
-it is very easy for firms to enter or exit the market
question
Under perfect competition, what is the same (equal) at all levels of output?
answer
price and marginal revenue
question
A portrait photographer produces output in packages of 100 photos each. If the output sole increases from 600 to 700 photos, total revenue increases from $1,200 to $1,400. What is the marginal revenue per photo?
answer
$2
question
In the short run, a perfectly competitive firm is producing at a price below average total cost. What is its economic profit?
answer
negative
question
The point of maximum profit in a business firm is where what and what are equal?
answer
MR = MC
Marginal Revenue = Marginal Cost
Marginal Revenue = Marginal Cost
question
When there is a permanent increase in market demand in a constant-cost industry, the industry's equilibrium price and quantity move along the industry's long-run supply curve, which is what (in regard to slope/direction)?
answer
horizontal
question
A perfectly competitive firm's short-run supply curve is the what?
answer
marginal cost curve above the average variable cost curve
question
Suppose there is a permanent decrease in market demand in a constant-cost industry. In the long-run, this change in demand will cause the industry to have... (basically, what will the impact be on the industry?)
answer
fewer firms and no change in market price
question
In long-run equilibrium, the perfectly competitive firm sets its price equal to what?
answer
-short-run average total cost
-short-run marginal cost
-long-run average cost
-short-run marginal cost
-long-run average cost
question
If there is a permanent increase in demand for the product of a perfectly competitive industry, the process of transition to a new long-run equilibrium will include what?
answer
-the entry of new firms
-temporarily higher profits
-temporarily higher profits
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
