Exam 6: The Supply Curve and the Behavior of Firms

Exhibit 6-3 -Refer to Exhibit 6-3. If output is 6 units, what must the output price be in order for the firm to break even? Round to the nearest penny.

Partnerships differ from sole proprietorships because partnerships

When the production function gets flatter as the quantity of labor increases, we know

A competitive market is

If only one firm exists in a market, the firm has no power over the market price.

Firms are assumed to maximize

The slope of the total cost curve as output increases reflects

An increase in market demand has no effect on producer surplus because producer surplus is related to supply.

Holding everything else equal, total revenue increases

Explain the difference between profit and producer surplus.

Variable costs are generally associated with the cost of

In moving down along a demand curve, total revenue

Refer to the table below. Find the fixed costs and the producer surplus when the firm produces the profit-maximizing quantity. What is the relationship between producer surplus and fixed costs?

When production increases, total costs

A firm maximizes losses when its output level is where marginal product equals marginal cost.

A firm is a(n)

Most firms in the United States are sole proprietorships.

If a firm leaves an industry, all else held equal, the market supply curve shifts left.

Exhibit 6-8 -Refer to Exhibit 6-8. Producer surplus in the market is illustrated by area

Total costs are