Exam 14: Firms in Competitive Markets.

Figure 14-5 Suppose a firm operating in a competitive market has the following cost curves: -Refer to Figure 14-5.Firms would be encouraged to enter this market for all prices that exceed

At its current level of production a profit-maximizing firm in a competitive market receives $12.50 for each unit it produces and faces an average total cost of $10.At the market price of $12.50 per unit,the firm's marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units.What is the firm's current profit? What is likely to occur in this market and why?

Figure 14-9 In the figure below, panel (a) depicts the linear marginal cost of a firm in a competitive market, and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firms. -Refer to Figure 14-9.When 100 identical firms participate in this market,at what price will 15,000 units be supplied to this market?

In the long run,a profit-maximizing firm will choose to exit a market when

Table 14-6 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-6.What is the average revenue when 4 units are sold?

The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000,total variable cost to be $130,000,and total revenue to be $125,000.Because of this information,in the short run,the Brookside Racquet Club should

Table 14-12 Bill's Birdhouses -Refer to Table 14-12.What is the average revenue when 4 units are sold?

If a competitive firm is currently producing a level of output at which profit is not maximized,then it must be true that

A sunk cost is one that

Table 14-9 Suppose that a firm in a competitive market faces the following revenues and costs: -Refer to Table 14-9.In order to maximize profit,the firm will produce a level of output where marginal cost is equal to

Table 14-5 -Refer to Table 14-5.The price of the product is

Suppose that in a competitive market the equilibrium price is $2.50.What is marginal revenue for the last unit sold by the typical firm in this market?

News reports from the western United States occasionally report incidents of cattle ranchers slaughtering a large number of newborn calves and burying them in mass graves rather than transporting them to markets.Assuming that this is rational behavior by profit-maximizing "firms," explain what economic factors may influence such behavior.

A book store that has market power can

When a profit-maximizing firm in a competitive market has zero economic profit,accounting profit

Figure 14-10 In the figure below, panel (a) depicts the linear marginal cost of a firm in a competitive market, and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firms. -Refer to Figure 14-10.If there are 500 identical firms in this market,what is the value of Q1?

Because the goods offered for sale in a competitive market are largely the same,

Scenario 14-4 As part of an estate settlement Mary received $1 million. She decided to use the money to purchase a small business in Anywhere, USA. Her business operates in a perfectly competitive industry. If Mary would have invested the $1 million in a risk-free bond fund she could have earned $100,000 each year. She also quit her job with Lucky.Com Inc. to devote all of her time to her new business. Her salary at Lucky.Com Inc. was $75,000 per year. -Refer to Scenario 14-4.How large would Mary's accounting profits need to be to allow her to attain zero economic profit?

Jose's restaurant operates in a perfectly competitive market.At the point where marginal cost equals marginal revenue,ATC = $20,AVC = $15,and the price per unit is $10.In this situation,

Winona's Fudge Shoppe is maximizing profits by producing 1,000 pounds of fudge per day.If Winona's fixed costs unexpectedly increase and the market price remains constant,then the short run profit-maximizing level of output