Chapter 8 Questions

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Refer to the above diagram. At any price below R the firm will shut down in the short run.

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Refer to the above diagram. At output C production will result in an economic profit.

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Refer to the above diagram. At the profit-maximizing output total revenue will be 0GLD.

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Refer to the above diagram. If demand fell to the level of FNJ, there would be no output at which the firm could realize an economic profit.

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Refer to the above diagram. If the firm produced D units of output at price G, it would earn a normal profit.

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Refer to the above diagram. This firm will maximize profits by producing output D.

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A competitive firm will produce in the short run so long as its price exceeds its average fixed cost.

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Although individual purely competitive firms can influence the price of their product, these firms as a group cannot influence market price.

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Firms in a monopolistically competitive industry have no reason to engage in nonprice competition because their products are uniquely different from other sellers in the market.

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In a purely competitive industry competition centers more on advertising and sales promotion than on price.

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In maximizing profit a firm will always produce that output where total revenues are at a maximum.

answer

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In the short run a competitive firm will always choose to shut down if product price is less than the lowest attainable average total cost.

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Marginal revenue is the addition to total revenue resulting from the sale of one more unit of output.

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Oligopoly firms may produce either standardized or differentiated products.

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Price and marginal revenue are identical for an individual purely competitive seller.

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The demand curve for a purely competitive industry is perfectly elastic, but the demand curves faced by individual firms in such an industry are downsloping.

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The short-run supply curve slopes upward because producers must be compensated for rising marginal costs.

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The term imperfect competition refers to every market structure besides pure competition.

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Refer to the above diagram, which pertains to a purely competitive firm. Curve A represents:

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total revenue only.

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Refer to the above diagram, which pertains to a purely competitive firm. Curve C represents:

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average revenue and marginal revenue.

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Refer to the above diagram. The firm will produce at a loss if price is:

answer

question

Refer to the above diagram. The firm will realize an economic profit if price is:

answer

question

Refer to the above diagram. The firm will shut down at any price less than:

answer

question

Refer to the above diagram. The firm's supply curve is the segment of the:

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MC curve above its intersection with the AVC curve.

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Refer to the above diagram. This firm will earn only a normal profit if product price is:

answer

question

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 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

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its:

answer

total variable costs.

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A purely competitive firm's short-run supply curve is:

answer

upsloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve.

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A purely competitive seller is:

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a "price taker."

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An industry comprised of 40 firms, none of which has more than 3 percent of the total market for a differentiated product is an example of:

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monopolistic competition.

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An industry comprised of a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions is called:

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oligopoly.

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An industry comprised of a very large number of sellers producing a standardized product is known as:

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pure competition.

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An industry comprised of four firms, each with about 25 percent of the total market for a product is an example of:

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oligopoly.

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Answer the question on the basis of the following cost data for a purely competitive seller: The above data are for:

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the short run.

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Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the above data. At 5 units of output average fixed cost, average variable cost, and average total cost are:

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$10, $60, and $70 respectively.

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Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the above data. The marginal cost of the fifth unit of output is

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$80.

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Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the above data. If product price is $75, the firm will produce:

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4 units of output

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Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the above data. Given the $75 product price, at its optimal output the firm will:

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realize a $30 economic profit.

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Answer the question on the basis of the following data confronting a firm: Refer to the above data. This firm is selling its output in a(n):

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purely competitive market.

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Answer the question on the basis of the following data confronting a firm: Refer to the above data. If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be:

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question

Answer the question on the basis of the following data confronting a firm: Refer to the above data. At the profit-maximizing output the firm's total revenue is:

answer

$48.

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Answer the question on the basis of the following data confronting a firm: Refer to the above data. Assuming total fixed costs equal to zero, the firm's:

answer

economic profit is $16.

1 of 43

question

Refer to the above diagram. At any price below R the firm will shut down in the short run.

answer

question

Refer to the above diagram. At output C production will result in an economic profit.

answer

question

Refer to the above diagram. At the profit-maximizing output total revenue will be 0GLD.

answer

question

Refer to the above diagram. If demand fell to the level of FNJ, there would be no output at which the firm could realize an economic profit.

answer

question

Refer to the above diagram. If the firm produced D units of output at price G, it would earn a normal profit.

answer

question

Refer to the above diagram. This firm will maximize profits by producing output D.

answer

question

A competitive firm will produce in the short run so long as its price exceeds its average fixed cost.

answer

question

Although individual purely competitive firms can influence the price of their product, these firms as a group cannot influence market price.

answer

question

Firms in a monopolistically competitive industry have no reason to engage in nonprice competition because their products are uniquely different from other sellers in the market.

answer

question

In a purely competitive industry competition centers more on advertising and sales promotion than on price.

answer

question

In maximizing profit a firm will always produce that output where total revenues are at a maximum.

answer

question

In the short run a competitive firm will always choose to shut down if product price is less than the lowest attainable average total cost.

answer

question

Marginal revenue is the addition to total revenue resulting from the sale of one more unit of output.

answer

question

Oligopoly firms may produce either standardized or differentiated products.

answer

question

Price and marginal revenue are identical for an individual purely competitive seller.

answer

question

The demand curve for a purely competitive industry is perfectly elastic, but the demand curves faced by individual firms in such an industry are downsloping.

answer

question

The short-run supply curve slopes upward because producers must be compensated for rising marginal costs.

answer

question

The term imperfect competition refers to every market structure besides pure competition.

answer

question

Refer to the above diagram, which pertains to a purely competitive firm. Curve A represents:

answer

total revenue only.

question

Refer to the above diagram, which pertains to a purely competitive firm. Curve C represents:

answer

average revenue and marginal revenue.

question

Refer to the above diagram. The firm will produce at a loss if price is:

answer

question

Refer to the above diagram. The firm will realize an economic profit if price is:

answer

question

Refer to the above diagram. The firm will shut down at any price less than:

answer

question

Refer to the above diagram. The firm's supply curve is the segment of the:

answer

MC curve above its intersection with the AVC curve.

question

Refer to the above diagram. This firm will earn only a normal profit if product price is:

answer

question

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 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

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its:

answer

total variable costs.

question

A purely competitive firm's short-run supply curve is:

answer

upsloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve.

question

A purely competitive seller is:

answer

a "price taker."

question

An industry comprised of 40 firms, none of which has more than 3 percent of the total market for a differentiated product is an example of:

answer

monopolistic competition.

question

An industry comprised of a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions is called:

answer

oligopoly.

question

An industry comprised of a very large number of sellers producing a standardized product is known as:

answer

pure competition.

question

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

Answer the question on the basis of the following cost data for a purely competitive seller: The above data are for:

answer

the short run.

question

answer

$10, $60, and $70 respectively.

question

Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the above data. The marginal cost of the fifth unit of output is

answer

$80.

question

Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the above data. If product price is $75, the firm will produce:

answer

4 units of output

question

Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the above data. Given the $75 product price, at its optimal output the firm will:

answer

realize a $30 economic profit.

question

Answer the question on the basis of the following data confronting a firm: Refer to the above data. This firm is selling its output in a(n):

answer

purely competitive market.

question

answer

question

Answer the question on the basis of the following data confronting a firm: Refer to the above data. At the profit-maximizing output the firm's total revenue is:

answer

$48.

question

Answer the question on the basis of the following data confronting a firm: Refer to the above data. Assuming total fixed costs equal to zero, the firm's:

answer

economic profit is $16.

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Chapter 8 Questions

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