Exam 8: Short-Run Costs and Output Decisions

A firm in a perfectly competitive industry is producing 50 units, its profit-maximizing quantity. Industry price is $2, total fixed costs are $25, and total variable costs are $40. The firm's economic profit is

Refer to the information provided in Table 8.1 below to answer the question(s) that follow. Table 8.1 -Refer to Table 8.1. Assume the price of labor (L) is $5 per unit, the price of capital (K) is $10 per unit, and that firms attempt to minimize costs. The total variable cost of producing one unit of output is

Short-run costs that do not depend on the level of output are

Refer to the information provided in Figure 8.7 below to answer the question(s) that follow. Figure 8.7 -Refer to Figure 8.7. If Buffy gives 17 perms per day, her total revenue is

Refer to the information provided in Figure 8.4 below to answer the question(s) that follow. Figure 8.4 -Refer to Figure 8.4. The marginal cost of the third microwave oven is

Refer to the information provided in Table 8.3 below to answer the question(s) that follow. Table 8.3 -Refer to Table 8.3. The marginal cost of the fourth unit is ________ and the average total cost of four units is ________.

If a perfectly competitive firm's average total cost curve is above its demand schedule at every level of output, then the firm will earn ________ profits.

One formula for ________ is ΔTVC/Δq.

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If this farmer produces the profit-maximizing level of soybeans when the market price is ________ per bushel, then her profit would be $0.

The upward-sloping portion of the perfectly competitive firm's average variable cost curve is the firm's short run supply curve.

The ________ curve intersects the average variable cost curve at the minimum value of the average variable cost curve.

Perfectly competitive firms minimize their losses by producing the output level where P = MR = AVC.

At an output of zero, ________ is zero.

In the short run

Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $800 per robot. To maximize profits, Robbie's Robots should

Refer to the information provided in Figure 8.9 below to answer the question(s) that follow. Figure 8.9 -Refer to Figure 8.9. This farmer's ________ level of output is 500 units of output.

Perfectly competitive firms sell homogeneous products.

The long run is a period of more than one year.

Refer to the information provided in Table 8.8 below to answer the following question(s). Table 8.8 -Refer to Table 8.8. Assume that Polynesian Fruit sells fruit baskets in a perfectly competitive market. The market price of a fruit basket is $44. To maximize profits, Polynesian Fruit should sell ________ fruit basket(s) and their profit is ________.

Refer to the information provided in Figure 8.9 below to answer the question(s) that follow. Figure 8.9 -Refer to Figure 8.9. If the market price of hay ________, then to maximize profits this farmer should produce 350 bales of hay.