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Exam 9: Firms in a Competitive Market

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Question 51

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Kimiko owns a cupcake shop in Newport Beach,California.The market for cupcakes is very competitive.At Kimiko's current production level,her marginal cost is $25 and her marginal revenue is $29.To maximize profits,Kimiko should

A) decrease production.
B) keep production the same.
C) increase the price.
D) decrease the price.
E) increase production.

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Question 52

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Refer to the accompanying table.A firm participating in a competitive market with these costs would be indifferent about producing or shutting down if the price is

A) $6.
B) $8.
C) $4.
D) $2.
E) either $6 or $8.

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Question 53

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Refer to the accompanying graph to answer the following questions: a.At what price levels would a firm make positive economic profits? b.At what price level would a firm incurring economic losses continue to produce? c.At what price level would a firm break even?

Refer to the accompanying figure to answer the following questions. -This firm would shut down in the long run if the price

At current production levels,the marginal revenue of a competitive firm is $15 and the marginal cost of the firm is $15.The firm should

What is the consequence of a firm in a competitive market selling a homogenous product?

If firms in a competitive market are incurring economic losses,we would expect firms to ________ the market,causing the ________ curve to shift to the ________.

As a firm attempts to expand production,it must ________ the wage it pays to attract additional help.This leads to ________ costs,making the long-run supply curve slope ________.

If Dorothy's Doughnuts is a perfectly competitive firm and is currently incurring economic losses of $500,

Firms in every market structure

The accompanying table represents the quantity produced,the total revenue,and the total cost of a firm operating in a perfectly competitive market.Refer to this table to answer the following questions. -When profits are maximized,profits are equal to

The market for hot dogs on the streets of New York City can be considered close to a perfectly competitive market.Because there are so many individuals buying and selling hot dogs

Draw a perfectly competitive,profit-maximizing firm that is incurring a short-run loss and will shut down.Be sure to include the marginal revenue curve,the marginal cost curve,the average total cost curve,and the average variable cost curve.

If firms in a competitive market are making positive economic profits,you would expect firms to ________ the market,causing the ________ curve to shift to the ________.

Use the following scenario to answer the following questions: Carmela's Churros is a perfectly competitive firm that sells desserts in Houston,Texas.Carmela's Churros currently is taking in $40,000 in revenues,and has $15,000 in explicit costs and $25,000 in implicit costs. -Carmela's Churros' economic profits are

Suppose a perfectly competitive paper firm can produce six tons of paper at an output level where marginal revenue is equal to marginal cost.The price per ton of paper is $100 and the average total cost is $75.What is the total profit or loss that the paper firm is earning?

Use the following scenario to answer the following questions: Chuck Diesel Burger is a food truck in Houston,Texas.Imagine that Chuck Diesel Burger's minimum average total cost (ATC) is $3.75 and that its minimum average variable cost (AVC) is $2.50.Assume there are no barriers to entrer into or exit from the food-truck market. -Chuck Diesel Burger will shut down if the price is equal to

In competitive markets

Refer to the accompanying table.A firm participating in a competitive market with these costs would always shut down if the price is

The city of Tustin,California,has spent $10 million on a project to build a new community college.It will cost the city $40 million to finish the project.When making the decision to continue the project,the city's chief economist tells the city council to ignore the $10 million because