Chapter 8 Microeconomics OpenStax

question

_________________________ refers to the additional revenue gained from selling one more unit.

answer

marginal revenue

question

In the [a], if profits are not possible, the perfectly competitive firm will seek out the quantity of output where [b].

answer

Short run, losses are lowest

question

Under perfect competition, any profit-maximizing producer faces a market price equal to its

answer

marginal costs

question

The term ______________________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product.

answer

price taker

question

It is said that in a perfectly competitive market, raising the price of a firm's product from the prevailing market price of $179.00 to $199.00,

answer

could likely result in a notable loss of sales to competitors

question

If a perfectly competitive firm is a price taker, then

answer

pressure from competing firms will force acceptance of the prevailing market price.

question

In a free market economy, firms operating in a perfectly competitive industry are said to have only one major choice to make. Which of the following correctly sets out that choice?

answer

what quantity to produce

question

When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained pattern of losses, it is:

answer

preparing to exit operations.

question

If a firm's revenues do not cover its average variable costs, then that firm has reached its ______________________ point.

answer

shutdown

question

Why are some producers forced to sell their products at the prevailing market price?

answer

high degree of similarity to competitor's products

question

Profit

answer

the difference between total revenue and total cost

question

Perfect Competition

answer

1. Many firms compete for consumer purchases
2. The products of each firm are identical
3. Low entry/exit barriers
4. Price takers
- Firms only choose HOW MUCH to produce

question

Profit Maximization Rule

answer

For all firms, no matter the competitive market structure, a firm will maximize profit for a given level of quantity where Marginal Revenue = Marginal cost (MR = MC)

1 of 13

question

_________________________ refers to the additional revenue gained from selling one more unit.

answer

marginal revenue

question

In the [a], if profits are not possible, the perfectly competitive firm will seek out the quantity of output where [b].

answer

Short run, losses are lowest

question

Under perfect competition, any profit-maximizing producer faces a market price equal to its

answer

marginal costs

question

The term ______________________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product.

answer

price taker

question

It is said that in a perfectly competitive market, raising the price of a firm's product from the prevailing market price of $179.00 to $199.00,

answer

could likely result in a notable loss of sales to competitors

question

If a perfectly competitive firm is a price taker, then

answer

pressure from competing firms will force acceptance of the prevailing market price.

question

In a free market economy, firms operating in a perfectly competitive industry are said to have only one major choice to make. Which of the following correctly sets out that choice?

answer

what quantity to produce

question

When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained pattern of losses, it is:

answer

preparing to exit operations.

question

If a firm's revenues do not cover its average variable costs, then that firm has reached its ______________________ point.

answer

shutdown

question

Why are some producers forced to sell their products at the prevailing market price?

answer

high degree of similarity to competitor's products

question

Profit

answer

the difference between total revenue and total cost

question

Perfect Competition

answer

1. Many firms compete for consumer purchases
2. The products of each firm are identical
3. Low entry/exit barriers
4. Price takers
- Firms only choose HOW MUCH to produce

question

Profit Maximization Rule

answer

For all firms, no matter the competitive market structure, a firm will maximize profit for a given level of quantity where Marginal Revenue = Marginal cost (MR = MC)

Order an Essay Now & Get These Features For Free:

Place an Order