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The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm ________ maximizing its profit and is ________. A) is;incurring an economic loss B) is;making zero economic profit C) is;making an economic profit D) is not;incurring an economic loss E) is not;making zero economic profit The above figure shows some a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 7 cans per day,the firm ________ maximizing its profit and is ________.


A) is;incurring an economic loss
B) is;making zero economic profit
C) is;making an economic profit
D) is not;incurring an economic loss
E) is not;making zero economic profit

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

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Does a perfectly competitive producer have any incentive to lower its price so it is below the current market price? Explain your answer

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A perfectly competitive producer has no ...

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The figure above shows a firm's marginal revenue and marginal cost curves. -Based on the figure above,the price of a can is $8;if the price increased to $12,then the firm would A) produce zero cans. B) decrease the amount of cans produces it but not to zero. C) not change the amount of cans it produces. D) increase the amount of cans it produces. E) More information is needed to determine what action the firm will take. The figure above shows a firm's marginal revenue and marginal cost curves. -Based on the figure above,the price of a can is $8;if the price increased to $12,then the firm would


A) produce zero cans.
B) decrease the amount of cans produces it but not to zero.
C) not change the amount of cans it produces.
D) increase the amount of cans it produces.
E) More information is needed to determine what action the firm will take.

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

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The figure above shows some of a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 10 cans per day,the firm ________ maximizing its profit and is ________. A) is;incurring an economic loss B) is;making zero economic profit C) is;making an economic profit D) is not;incurring an economic loss E) is not;making zero economic profit The figure above shows some of a firm's cost curves and its marginal revenue curve. -Based on the figure above,if the firm produces 10 cans per day,the firm ________ maximizing its profit and is ________.


A) is;incurring an economic loss
B) is;making zero economic profit
C) is;making an economic profit
D) is not;incurring an economic loss
E) is not;making zero economic profit

F) C) and D)
G) A) and D)

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The market supply in the short run for the perfectly competitive industry is


A) the same as each producer's supply.
B) the sum of the supply schedules of all firms.
C) divided up according to each firm's selling price.
D) set at the maximum price a buyer will pay for one unit.
E) equal to the average of each firm's supply schedule.

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

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If a perfectly competitive firm raised the price of its product,


A) its profits would increase.
B) the quantity of output it sells decreases to zero.
C) rival firms will follow suit and raise their prices also.
D) the firm will be forced to advertise more.
E) its total revenue would rise but its total cost would rise by more.

F) C) and E)
G) A) and E)

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If perfectly competitive firms are making an economic profit,then


A) the market is in its long-run equilibrium.
B) new firms enter the market and the equilibrium profit of the firms already in the market decreases.
C) new firms enter the market and the equilibrium profit of the firms already in the market increases.
D) firms exit the market and the economic profit of the surviving firms in the market decreases.
E) firms exit the market and the economic profit of the surviving firms in the market increases.

F) A) and D)
G) A) and C)

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Perfect competition ________ a fair outcome ________.


A) achieves;because both the fair rules and fair results conditions are met
B) achieves;because total surplus is maximized
C) does not achieve;because entrepreneurs only earn a normal profit
D) does not achieve;because firms must be price takers
E) may achieve;if average total costs are minimized

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

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Firms exit a competitive market when they incur an economic loss.In the long run,this exit means that the economic losses of the surviving firms


A) increase.
B) decrease until they equal zero.
C) decrease until economic profits are earned.
D) do not change.
E) might change but more information is needed about what happens to the price of the good as the firms exit.

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

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The marginal revenue curve for a perfectly competitive firm is


A) horizontal.
B) vertical.
C) upward sloping.
D) downward sloping.
E) a straight line coming out of the origin with a 45 degree slope.

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

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Suppose the price of a can was $5.10.In this case,to maximize its profit,the firm illustrated in the figure above would


A) decrease its production and would make an economic profit.
B) not change its production and would make zero economic profit.
C) not change its production and would make an economic profit.
D) decrease its production and would incur an economic loss.
E) not change its production and would incur an economic loss.

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

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-American restaurants receive their supply of baby back-ribs from American farms and from farms in Denmark.In the figures above,the left diagram shows the perfectly competitive market for baby back ribs in the United States.The right figure shows the situation at Premium Standard Farm in Kansas,one of the many U.S.farms supplying these ribs. Now assume that the United States imposes a ban on European meat in response to the foot-and-mouth disease that has infected livestock in Europe.(Which the United States did a few years ago. )In particular,suppose that the U.S.ban decreases the supply by 40 tons a year.Using the figure on the left,show the impact of this ban on the baby back rib market.Using the figure on the right,show the impact on Premium Standard Farm in Kansas. -American restaurants receive their supply of baby back-ribs from American farms and from farms in Denmark.In the figures above,the left diagram shows the perfectly competitive market for baby back ribs in the United States.The right figure shows the situation at Premium Standard Farm in Kansas,one of the many U.S.farms supplying these ribs. Now assume that the United States imposes a ban on European meat in response to the foot-and-mouth disease that has infected livestock in Europe.(Which the United States did a few years ago. )In particular,suppose that the U.S.ban decreases the supply by 40 tons a year.Using the figure on the left,show the impact of this ban on the baby back rib market.Using the figure on the right,show the impact on Premium Standard Farm in Kansas. -American restaurants receive their supply of baby back-ribs from American farms and from farms in Denmark.In the figures above,the left diagram shows the perfectly competitive market for baby back ribs in the United States.The right figure shows the situation at Premium Standard Farm in Kansas,one of the many U.S.farms supplying these ribs. Now assume that the United States imposes a ban on European meat in response to the foot-and-mouth disease that has infected livestock in Europe.(Which the United States did a few years ago. )In particular,suppose that the U.S.ban decreases the supply by 40 tons a year.Using the figure on the left,show the impact of this ban on the baby back rib market.Using the figure on the right,show the impact on Premium Standard Farm in Kansas.

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blured image blured image The ban on European meat decreases the...

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A perfectly competitive firm is producing 50 units of output and selling at the market price of $23.The firm's average total cost is $20.What is the firm's total cost?


A) $23
B) $150
C) $1,000
D) $1,150
E) $20

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

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The firm in the figure above has a total cost equal to ________.


A) $5.14 × 7
B) $3.00 × 7
C) ($5.14 - $3.00) × 7
D) ($3.00 - $5.14) × 7
E) None of the above answers is correct because more information is needed.

F) A) and B)
G) B) and C)

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-The figure above shows a perfectly competitive firm.If the market price is $40 per unit,then the firm produces ________ units and makes an economic profit that is ________. A) more than 45;more than $400 B) 40;more than $400 C) 40;less than $400 D) 30;equal to zero E) 30;more than $250 -The figure above shows a perfectly competitive firm.If the market price is $40 per unit,then the firm produces ________ units and makes an economic profit that is ________.


A) more than 45;more than $400
B) 40;more than $400
C) 40;less than $400
D) 30;equal to zero
E) 30;more than $250

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

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If a perfectly competitive firm manufacturing chairs produces 100 more chairs,what happens to the market price of a chair?

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The price will not change.Any one perfec...

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In the long run,a perfectly competitive firm makes


A) a positive economic profit.
B) zero economic profit.
C) negative economic profit,that is,an economic loss.
D) zero accounting profit.
E) either a positive economic profit or a normal profit.

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

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Technological change allows perfectly competitive firms to ________ and leads to ________.


A) lower their costs;lower prices for consumers
B) raise their prices;higher prices for consumers
C) lower their costs;higher prices so the firms can earn economic profits in the long run
D) raise their costs;higher prices and maximum profits in the long run
E) lower their costs;deadweight loss

F) All of the above
G) B) and C)

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If there are 1,000 identical rice farmers who are each willing to supply 200 bushels of rice at $2 per bushel,what price and quantity combination is a point on the market supply curve for rice?


A) $2 and 200 bushels
B) $2 and 200,000 bushels
C) $2,000 and 200,000 bushels
D) $2,000 and 1,000 bushels
E) $2 and 1,000 farmers

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

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Describe how economic losses are eliminated in a perfectly competitive industry.

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If firms are incurring economic losses,s...

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