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Exam 12: Perfect Competition and the Supply Curve

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Question 71

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In perfect competition, a change in fixed cost will:

A) cause a change in the price in the short run.
B) cause a change in output in the short run.
C) encourage entry or exit in the long run so that price will change enough to leave firms earning zero profits.
D) cause a change in variable cost.

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Question 72

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Use the following to answer questions: -(Table: Cherry Farm) Look at the table Cherry Farm. If the price is $4 per pound:

A) firms will enter the industry.
B) firms will exit the industry.
C) the industry is in long-run equilibrium.
D) the industry has maximized average total cost.

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Question 73

Multiple Choice

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Firms will make a profit in the long run or short run if the price is:

For a perfectly competitive firm, the short-run supply curve is the:

Use the following to answer questions: -(Table: Total Cost for a Perfectly Competitive Firm) Look at the table Total Cost for a Perfectly Competitive Firm. In the short run, the firm will produce, but at a loss, if the price is:

Use the following to answer questions: -(Table: Total Cost and Output) Look at the table Total Cost and Output, which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. If the market price of a tub of ice cream is $50, what quantity will Sergei produce to maximize profit?

If a perfectly competitive firm is producing a quantity where MC > MR, then profit:

Suppose Sarah's pottery studio is charging the market price, which is just higher than her minimum average total cost. This means that Sarah:

Use the following to answer questions: -(Table: Total Cost and Output) Look at the table Total Cost and Output, which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. Where does Sergei's short-run supply curve begin?

Use the following to answer questions: -(Table: Total Cost and Output) Look at the table Total Cost and Output, which describes Sergei's total costs for his perfectly competitive all-natural ice cream firm. If the market price of a tub of ice cream is $67.50, how much is Sergei's total cost at the profit-maximizing output?

In the short run, a perfectly competitive firm produces output and earns ZERO economic profit if:

A perfectly competitive industry is in long-run equilibrium. Now suppose that the fixed costs of firms in the industry decrease. Describe how this change will affect short-run economic profits. How will this industry adjust in the long run?

Use the following to answer questions: Figure: A Perfectly Competitive Firm in the Short Run -(Figure: A Perfectly Competitive Firm in the Short Run) Look at the figure A Perfectly Competitive Firm in the Short Run. If the market price is G, the firm's total economic profit at its most profitable level of output is:

Use the following to answer questions: Figure: A Perfectly Competitive Firm in the Short Run -(Figure: A Perfectly Competitive Firm in the Short Run) Look at the figure A Perfectly Competitive Firm in the Short Run. The firm will shut down in the short run if the price falls below:

Which of the following is TRUE?

The horizontal sum of individual firms' MC curves is the:

If the price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will:

Use the following to answer questions: Figure: The Perfectly Competitive Firm -(Figure: The Perfectly Competitive Firm) Look at the figure The Perfectly Competitive Firm. The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit. The firm's economic profit in the long run will be:

A perfectly competitive industry with constant costs initially operates in long-run equilibrium. When demand increases, in the long run and the short run:

The short-run supply curve for a perfectly competitive firm is the ____ cost curve above the _____ price.