question
If the wheat industry is perfectly competitive with a market price of $4 per bushel and Farmer Brown charged $5 per bushel, how many bushels would Farmer Brown sell?
answer
none
question
A perfectly competitive firm's short−run supply curve is
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its marginal cost curve above the AVC curve.
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One requirement for an industry to be perfectly competitive is that
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there are no restrictions on entry into or exit from the market.
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A firm that is a price taker faces
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a perfectly elastic demand curve
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A firm maximizes its profit by producing the amount of output such that
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marginal revenue equals marginal cost.
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To maximize its profit, in the short run a perfectly competitive firm decides
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what quantity of output to produce.
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If a firm in a perfectly competitive market faces an equilibrium price of $5, its marginal revenue
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will also be $5.
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If a firm shuts down, it
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incurs an economic loss equal to its total fixed cost.
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In the long run, a perfectly competitive firm earns
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zero economic profit.
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When firms in a perfectly competitive market are earning an economic profit, in the long run
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new firms will enter the market.
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A perfectly competitive firm
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sells a product that has perfect substitutes.
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Under what conditions would a perfectly competitive cotton farmer who is incurring an economic loss temporarily stay in business?
answer
if the total revenue exceeds the total variable cost
question
Marginal revenue is
answer
the change in total revenue from a one−unit increase in the quantity sold.
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