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In perfect competition, the marginal revenue curve
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and the demand curve facing the firm are identical
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Assume Dell Computer Company operation is perfectly competitive market producing 5,000 computers per day. At this output level, price exceeds the firm's marginal cost. To maximize profits, Dell should
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increase their output
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If an individual perfectly competitive firm charges a price above the industry equilibrium price, it will
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not sell any of what it produces
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Any firms __________ equals P x q
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total revenue
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If Bubbas Bait and Tackle is producing where MR=MC, Bubbas Bait and tackle must be
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maximizing profits
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Maxine's cookie shop sells chocolate chip cookies in a perfectly compettive market for $2 per dozen. Maxine currently produces 200 dozen cookies per day and average total cost at this level of production is $1.75. What level of profit is the firm earning?
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Profit= 50
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In a monopoly, the market demand curve is:
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The same as the demand curve facing the firm
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Assume and monopolist can sell 45 units of a good for $1.50 each and can sell 46 units of that good for $1.45 each. The marginal revenue of the 46th unit is
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-$.80
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To maximize profit, the monopolist produces on the_______ portion of the demand curve where_______
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elastic, marginal revenue equals marginal cost
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One difference between a monopoly and a competitive firm is that
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a monopoly faces a downward sloping demand curve
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If the inverse demand curve a monopoly faces is p=100-2Q, and MC is constant at 16, then profit maximization is achieved when the monopoly sets price qual to
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$8
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The monopoly maximizes profit by setting
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a marginal revenue equal to marginal cost
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A monopoly sets a price of $50 per unit for an item that has a marginal cost of $10. Assuming profit maximization. The implicit demand elasticity is
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-1.25
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Marginal Profit is equal to
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Marginal revenue minus marginal cost
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The profit-maximizing level of output, marginal profit
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is zero
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The amount of output that a competitive firm decides to sell has no effect on the market price in a competitive industry because
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The firm's output is a small fraction of the entire industry's output
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Compared to the equilibrium price ad quantity sold in a competitive market, a monopolist will charge a________ price and sell a ________ quantity
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higher, smaller
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If a monopolist sets her output such that marginal revenue, marginal cost and average total cost are equal, economic profit must me:
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positive
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A monopolist has equated marginal revenue to zero. The firm has:
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maximized revenue
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A monopolist has determined that as the current level of output the price elasticity of demand is -.15. Which of the following statements is true?
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The firm should cut output
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Some sellers may behave as if they operate in a perfectly competitive market if the market demand is
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very elastic
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marginal revenue (MR) is
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<>TR/<>Q
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Marginal Profit is equal to
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Marginal revenue minus marginal cost
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At the profit-maximizing level of output, marginal profit
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is zero
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In perfect competition, the marginal revenue curve
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and the demand curve facing the firm are identical
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Bettie's Breakfast, a perfectly competitive eatery, sells it's "Breakfast Special" for $5.00. The costs of waitress, cooks, power, food, etc. average out to $3.95 per meal. The costs of the lease, insurance, and other such expenses average out to $1.25 per meal. Bettie should
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continue producing in the short run, but plan to go out of business in the long run
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The relationship between price that a perfectly competitive firm can charge buyers and the firms's marginal revenue is that the price is_________ marginal revenue over all output
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equal
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When the price by a competitive firm was $5, the firm produced nothing in the short run. However, when the price rose to $10, the firm produced 100 tons of output. From this we can infer that
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The minimum value of the firm's average variable cost lays between $5 and %10
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The market demand for a carpet has been estimated as... Determine the profit (or loss) earned by the typical firm
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18.77
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When the demand curve is downward sloping, marginal revenue is
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less than price
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Which of the following is true at the output level where P=MC
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The monopolist is not maximizing profit and should decrease output
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A monopolist has set her level of output to maximize profit. The firms marginal revenue is $20, and the price elasticity of demand is -2.0. The firms profit maximizing price is approximately
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$40
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Barbara output?
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72
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Barbara price of her product?
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22
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Marginal cost for green ink is 5Q how much ink to maximize profit?
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250
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Refer to scenario 10.7. Suppose that the firm chooses to produce 200 ink pads. At this level of output the demand for ink pads is
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elastic
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What is the value of Lerner index under perfect competition
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0
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Suppose that the competitive market for rice in Japan was suddenly monopolized. The effect of such a change would be
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to decrease the consumer surplus of Japanese rice consumers
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DVDs can be produced at a constant marginal cost of $10. THE DVD for Rambeu 17 is priced at $20 per disk. What are the Lerner indices for these two movies
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.5 and .67, respectively
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The deadweight loss from the monopoly power is
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$1012.50
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Mau Macadamia inc has a monopoly
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2,700
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