Exam 9: Price Takers and the Competitive Process

Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. To maximize its profit, the firm should

Use the figure to answer the following question(s). Figure 9-11 -Which of the following represents the firm's total cost of producing the profit-maximizing output in Figure 9-11?

Which of the following will tend to increase the ability of a union to increase the wages of its members?

If there is an increase in market demand in a competitive price-taker market, then in the short run

Which of the following states had the lowest incidence of union membership as a percent of all wage and salary workers in recent years?

In general, firms will produce at a rate of output such that marginal revenue equals marginal cost because this output rate will

Which of the following is necessary for the presence of competition in a market?

If a technological advance lowers a firm's production costs, why do prices typically fall? Shouldn't the firm maintain the same price and earn economic profit?

If occupational safety laws were changed so that firms no longer had to take expensive steps to meet regulatory requirements, we would expect

The exit of existing firms from a competitive market will

Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?

A competitive price-taker firm's marginal cost curve is regarded as its supply curve because

As the percentage of the labor force belonging to a union fell in the United States during the 1955 through early 2000 period, the share of national income going to labor

If a firm is a price taker and wants to earn as much profit as possible, it should expand output

If a competitive price-taking firm is operating in long-run equilibrium and market demand suddenly falls, the short-run result will be

If a price-taker industry is in long-run equilibrium, the market price in the industry will be just sufficient to cover the firm's average

As the period for firms to expand output is lengthened, the elasticity of the market supply curve will

Which of the following is a primary difference between price takers and price searchers that operate in markets with low barriers to entry?

At a firm's profit-maximizing level of output, its price is $200 and its short-run average total cost is $225. The firm

A strike, or the threat of one, is most likely to be effective when