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The Competitive Industry and Firm -Refer to the graph above to answer this question.What is the total loss at the shut-down price? A) $30. B) $100. C) $150. D) $210. E) $250. The Competitive Industry and Firm -Refer to the graph above to answer this question.What is the total loss at the shut-down price?


A) $30.
B) $100.
C) $150.
D) $210.
E) $250.

F) A) and B)
G) D) and E)

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The following graph shows the costs for a perfectly competitive producer: The following graph shows the costs for a perfectly competitive producer: -Refer to the above graph to answer this question.What is the value of the break-even price? A) P1. B) P2. C) P3. D) P4. E) P5. -Refer to the above graph to answer this question.What is the value of the break-even price?


A) P1.
B) P2.
C) P3.
D) P4.
E) P5.

F) D) and E)
G) A) and B)

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The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run: 1.produce more 2.produce less. 3.shut down 4.cannot be determined from the information. -Refer to the information above to answer this question.If the price exceeds the firm's marginal cost and is above its average variable costs,what should the firm do?


A) 1.
B) 2.
C) 3.
D) 4.

E) None of the above
F) A) and B)

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The following graph shows the costs for a perfectly competitive producer: The following graph shows the costs for a perfectly competitive producer: -Refer to the above graph to answer this question.If the price of the product is $35,what will be the total profit? A) 0. B) $90. C) $900. D) $3,150. E) Cannot be determined. -Refer to the above graph to answer this question.If the price of the product is $35,what will be the total profit?


A) 0.
B) $90.
C) $900.
D) $3,150.
E) Cannot be determined.

F) C) and D)
G) B) and D)

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What type of product is sold by the representative firm in a perfectly competitive market?


A) The same as is sold by the other firms.
B) A unique product.
C) A product similar to that sold by the other firms.
D) It could be any of the above three types.

E) A) and C)
F) A) and B)

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Graph A shows the market demand and supply in a perfectly competitive market.Graph B shows the cost curves of a representative profit-maximizing firm in that industry. Graph A shows the market demand and supply in a perfectly competitive market.Graph B shows the cost curves of a representative profit-maximizing firm in that industry. -Refer to the above graph to answer this question.If the market is in equilibrium,what quantity will the firm produce? A) 30. B) 50. C) 70. D) 90. E) 100. -Refer to the above graph to answer this question.If the market is in equilibrium,what quantity will the firm produce?


A) 30.
B) 50.
C) 70.
D) 90.
E) 100.

F) A) and E)
G) A) and B)

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If the price of a product increases,which of the following statements regarding the perfectly competitive firm is correct?


A) Its average revenue curve will be steeper.
B) Its average revenue curve will be flatter.
C) Its marginal revenue curve will be flatter.
D) Its total revenue curve will be steeper.

E) B) and D)
F) B) and C)

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In what situation should a firm shut down in the short run?


A) When its total revenue is less than its total fixed costs at all output levels.
B) When its total revenue exceeds its total variable costs at all output levels.
C) When the price is below its lowest average variable cost at all output levels.
D) When the price is below its lowest average total cost at all output levels.

E) A) and B)
F) A) and C)

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Consider the following table of numbers,which represents demand and cost conditions for a competitive firm.The price of the product this firm produces is $50. Consider the following table of numbers,which represents demand and cost conditions for a competitive firm.The price of the product this firm produces is $50. (a)Fill in the missing values. (b)What level of output should the firm produce? Why? (c)What do you predict will happen to the number of firms in the industry? Why? (d)What do you predict will happen to supply and the market price? (a)Fill in the missing values. (b)What level of output should the firm produce? Why? (c)What do you predict will happen to the number of firms in the industry? Why? (d)What do you predict will happen to supply and the market price?

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a)
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b)4 units.The firm produces at thi...

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The data are for a firm operating in perfect competition. The data are for a firm operating in perfect competition. -Use Table 8.7 to answer this question.What is the firm's break-even price? A) $60. B) $70. C) $86. D) $200. -Use Table 8.7 to answer this question.What is the firm's break-even price?


A) $60.
B) $70.
C) $86.
D) $200.

E) B) and C)
F) None of the above

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You are running a business in a perfectly competitive market.Your product sells for $5 and your marginal costs rise as output rises. (a)If the cost of producing another unit of output is $4,what should you do? What will happen to your profit? (b)If the cost incurred from your last unit of output produced is $6,what has happened to your profit? What should you do about this? (c)What general rule do the above examples suggest about how a firm should determine the level of output to produce so as to maximize profit?

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(a)You should produce another unit.Doing...

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What is average revenue?


A) The price multiplied by the quantity sold.
B) The total revenue divided by the price.
C) The extra revenue derived from the sale of one more unit.
D) It is equal to the price in perfectly competitive markets.

E) C) and D)
F) B) and D)

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