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Exam 11: Perfect Competition and the Supply Curve

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Question 181

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Suppose a perfectly competitive firm can increase its profits by increasing its output. Then it must be true that the firm's _____ exceeds its _____.

A) marginal revenue; marginal cost
B) price; average total cost but is less than marginal cost
C) marginal cost; marginal revenue
D) price; marginal revenue

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Question 182

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A perfectly competitive firm's supply curve is its marginal cost curve above the average variable cost curve.

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Question 183

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The competitive model assumes all of the following EXCEPT:

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. The firm will produce at a profit in the short run if the price is at least:

Use the following to answer questions: Figure: The Profit-Maximizing Firm in the Short Run -(Figure: The Profit-Maximizing Firm in the Short Run) Look at the figure The Profit-Maximizing Firm in the Short Run. If the market price is less than P₂, the firm will _____ in the short run.

Use the following to answer question Figure: Total Revenue and Total Cost -(Figure: Total Revenue and Total Cost) Look at the figure Total Revenue and Total Cost. The most profitable level of output occurs at quantity:

If a perfectly competitive firm sells 300 units of output at $1 per unit, its marginal revenue 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 $35, how many tubs of ice cream will Sergei produce in the short run?

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

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. Which of the following is a point on Sergei's short-run supply curve?

Use the following to answer questions: -(Table: Variable Costs for Lots) Look at the table Variable Costs for Lots. During the winter, Alexa runs a snow-clearing service in a perfectly competitive industry. Assume that costs are constant in each interval; that is, the variable cost of clearing anywhere from 1 through 10 lots is $200. Her only fixed cost is $1,000 for a snowplow. Her variable costs include fuel, her time, and hot coffee. What is Alexa's shut-down price in the short run?

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. The firm will stop production and shut down if the price is:

In the short run, for a perfectly competitive firm, the portion of the MC curve at or above the shut-down price is also its:

Use the following to answer questions: Figure: Game-Day Shirts -(Figure: Game-Day Shirts) Rick is one of 10 vendors who sell game-day T-shirts at football games in a perfectly competitive market. His costs are identical to the costs of the other 9 vendors. If the price of a shirt is $6, the short-run industry supply will be _____ shirts.

Use the following to answer questions: Figure: Game-Day Shirts -(Figure: Game-Day Shirts) Rick is one of 10 vendors who sell game-day T-shirts at football games in a perfectly competitive market. His costs are identical to the costs of the other 9 vendors. If the industry is in long-run equilibrium, how many shirts will each vendor sell?