Exercise 8: Perfect Competition

question

If a local California avocado stand operates in a perfectly competitive market, that stand owner will be a:

answer

price-taker

question

All except one of the following are characteristics of perfect competition. Which is the exception?

answer

There are many producers; one firm has a 25% market share, and all the remaining firms have a market share of less than 2% each.

question

In perfect competition, each firm:

answer

produces a standardized product.

question

The demand curve for a perfectly competitive firm is:

answer

perfectly elastic.

question

Price-takers are individuals in a market who:

answer

have no ability to affect the price of a good in a market.

question

Marginal revenue:

answer

equals the market price in perfect competition.

question

Marginal revenue is a firm's:

answer

increase in total revenue when it sells an additional unit of output.

question

If it produces, a perfectly competitive firm will maximize profits at which:

answer

marginal revenue equals marginal cost.

question

Zoe's Bakery determines that P < ATC and P > AVC. Zoe should:

answer

continue to operate even though she is experiencing an economic loss.

question

A perfectly competitive firm is definitely earning an economic profit when:

answer

P > ATC

question

A perfectly competitive firm operating in the short run producing 100 units of output has ATC = $6 and AFC = $2. The market price is $3 and is equal to MC. In order to maximize profits (or minimize losses), this firm should:

answer

shut down.

question

The short-run supply curve for a perfectly competitive firm is its:

answer

marginal cost curve above its average variable cost curve.

question

A perfectly competitive firm maximizes profit by producing the quantity at which:

answer

MR = MC

question

A perfectly competitive firm will incur an economic loss but will continue producing output in the short run if price is:

answer

greater than average variable cost but less than average total cost.

question

Economic profits in a perfectly competitive industry induce ________, and losses induce ________.

answer

entry; exit

1 of 15

question

If a local California avocado stand operates in a perfectly competitive market, that stand owner will be a:

answer

price-taker

question

All except one of the following are characteristics of perfect competition. Which is the exception?

answer

There are many producers; one firm has a 25% market share, and all the remaining firms have a market share of less than 2% each.

question

In perfect competition, each firm:

answer

produces a standardized product.

question

The demand curve for a perfectly competitive firm is:

answer

perfectly elastic.

question

Price-takers are individuals in a market who:

answer

have no ability to affect the price of a good in a market.

question

Marginal revenue:

answer

equals the market price in perfect competition.

question

Marginal revenue is a firm's:

answer

increase in total revenue when it sells an additional unit of output.

question

If it produces, a perfectly competitive firm will maximize profits at which:

answer

marginal revenue equals marginal cost.

question

Zoe's Bakery determines that P < ATC and P > AVC. Zoe should:

answer

continue to operate even though she is experiencing an economic loss.

question

A perfectly competitive firm is definitely earning an economic profit when:

answer

P > ATC

question

answer

shut down.

question

The short-run supply curve for a perfectly competitive firm is its:

answer

marginal cost curve above its average variable cost curve.

question

A perfectly competitive firm maximizes profit by producing the quantity at which:

answer

MR = MC

question

A perfectly competitive firm will incur an economic loss but will continue producing output in the short run if price is:

answer

greater than average variable cost but less than average total cost.

question

Economic profits in a perfectly competitive industry induce ________, and losses induce ________.

answer

entry; exit

Continue to order Get a quote

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Exercise 8: Perfect Competition

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee