Exam 10: Pure Competition in the Short Run

Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation

Given the accompanying diagram, which level of output should the entrepreneur choose to maximize profits?

Price and marginal revenue are identical for an individual purely competitive seller.

Refer to the data in the accompanying table. If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be

Which of the following industries most closely approximates pure competition?

The Ajax Manufacturing Company is selling in a purely competitive market. Its output is 100 units, which sell at $4 each. At this level of output, total cost is $600, total fixed cost is $100, and marginal cost is $4. The firm should

Why can't an individual firm raise its price by reducing output or lower its price to increase sales volume in a purely competitive market?

As long as an additional unit of output yields a marginal revenue larger than its marginal cost, it will be adding to total profits of the firm.

The accompanying table gives cost data for a firm that is selling in a purely competitive market. If the market price for the firm's product is $12, the competitive firm should produce

Local electric or gas utility companies mostly operate in which market structure?

The accompanying table gives cost data for a firm that is selling in a purely competitive market. If product price is $60, the firm will

The table gives data for a purely competitive, profit-maximizing firm. Based on this information, in the short run how much is this firm earning in economic profit (or losing, as reflected by negative numbers)?

In which of the following market structures is there clear-cut mutual interdependence with respect to price-output policies?

Refer to the accompanying graph for a purely competitive firm. When the firm is in equilibrium in the short run, its average fixed cost is

Refer to the diagram for a purely competitive producer. The firm's short-run supply curve is

The fallacy of composition states that

Replacement and repair costs

An industry comprising four firms, each with about 25 percent of the total market for a product, is an example of

Given the data in the table, at what quantity would a purely competitive firm cover all of its costs and earn only normal profits?

The accompanying table gives cost data for a firm that is selling in a purely competitive market. If the market price for this firm's product is $15, it will produce