ScienceEconomicsChapter 6 example #31370
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Chapter 6

Paulina Mitchell avatar Paulina Mitchell
25 July 2022
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question
An industry comprised of four firms, each with about 25 percent of the total market for a product, is an example of:
An industry comprised of four firms, each with about 25 percent of the total market for a product, is an example of:
answer
oligopoly.
question
Which of the following is NOT a characteristic of pure competition?
Which of the following is NOT a characteristic of pure competition?
answer
price strategies by firms
question
Which of the following is characteristic of a purely competitive seller's demand curve?
Which of the following is characteristic of a purely competitive seller's demand curve?
answer
Price and marginal revenue are equal at all levels of output.
question
If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:
answer
will also be $5.
question
The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.
The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.
answer
downsloping; perfectly elastic
question
A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating:
A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating:
answer
marginal revenue and marginal cost.
question
A firm reaches a break-even point (normal profit position) where:
A firm reaches a break-even point (normal profit position) where:
answer
total revenue and total cost are equal.
question
In the short run, the individual competitive firm's supply curve is that segment of the:
answer
marginal cost curve lying above the average variable cost curve.
question
Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation:
answer
is realizing an economic profit of $40.
question
If a purely competitive firm shuts down in the short run:
If a purely competitive firm shuts down in the short run:
answer
it will realize a loss equal to its total fixed costs.
question
In the short run, a purely competitive firm will always make an economic profit if:
answer
P > ATC.
question
A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:
A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:
answer
produce because the resulting loss is less than its TFC.
question
If a purely competitive firm is producing at some level less than the profit-maximizing output, then:
answer
marginal revenue exceeds marginal cost.
question
Assume for a competitive firm that MC = AVC at $12, MC = ATC at $20, and MC = MR at $16. This firm will:
Assume for a competitive firm that MC = AVC at $12, MC = ATC at $20, and MC = MR at $16. This firm will:
answer
minimize its losses by producing in the short run.
question
If a purely competitive firm is maximizing economic profit:
answer
it may or may not be maximizing per-unit profit