Exam 10: Pure Competition in the Short Run

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output is $4.00 and the market price is $4.50. What should the firm do?

If at the MC = MR output, AVC exceeds price,

The accompanying graph shows the cost curves for a competitive firm. If the market price of the product is $1.05 per unit, then the firm will produce how many units in the short run?

In which two market models would advertising be used most often?

In pure competition, a competitive firm's supply curve is that section of its marginal cost curve above ATC, and at any price below the average cost, the firm will produce nothing.

If a purely competitive firm is producing a level of output where the marginal revenue is less than the marginal cost, then its profits must be negative.

At output level H in the provided graph, the area

In a typical graph for a purely competitive firm, at the point where the total cost and total revenue curves intersect, the firm

The firm represented in this diagram, which gives short-run data, is selling under conditions of

Which of the following is not a basic market model?

The firm represented by the diagram would maximize its profit where

At P ₃ in the accompanying diagram, this firm will

The lowest point on a purely competitive firm's short-run supply curve corresponds to

An industry comprising 50 firms, each with about 2 percent of the total market for a differentiated product, is an example of

The short-run supply curve of a purely competitive producer is based primarily on its

The accompanying table gives cost data for a firm that is selling in a purely competitive market. At 3 units of output, total variable cost is ____ and total cost is ____.

Curve (2)in the diagram is a purely competitive firm's

A competitive firm will maximize profits at that output at which

Refer to the accompanying diagram. The firm will shut down at any price less than

The fact that a purely competitive firm's total revenue curve is linear and upsloping to the right implies that