Exam 9: Price Takers and the Competitive Process

Table 9-2 Refer to Table 9-2. This table provides information on a competitive price-taker firm's output, marginal revenue, and marginal cost. If the firm is currently producing 14 units, what would you advise them to do?

The figure shows a representative firm in a price-taker market. Which of the following is true regarding the situation depicted in the figure?

Other things constant, if wheat production is a price-taker industry, a decrease in the price of fertilizer used to grow wheat will

Use the figure to answer the following question(s). Figure 9-5 If the market price in Figure 9-5 increases to $4, what output should the firm produce, and what would be the firm's maximum profit?

If a product is manufactured under conditions of constant cost, an increase in the demand for the product will increase

Competition as a dynamic process implies that the individual firms in an industry

As market price increases, in the short run, a profit-maximizing firm in a price-taker market will expand output along its

Which of the following conditions will be present when a price-taker market is in long-run equilibrium?

Use the figure to answer the following question(s). Figure 9-4 Figure 9-4 indicates the cost conditions for a firm operating in a price-taker market. If the market price of the firm's product is $6, what action will maximize the firm's profit?

When a competitive price-taker market is in long-run equilibrium

Suppose that sharply lower coffee prices lead to a decrease in the demand for tea. Tea price decreases, and the tea producers experience short-run economic losses. If the tea industry is a price-taker market, after sufficient time is allowed for the market to adjust fully to the decrease in the demand for tea, one would expect the tea industry's output to

If profit-seeking entrepreneurs are going to be successful, they must

In a price-taker market, economic losses indicate that

There are 1,000 identical firms in a price-taker industry. In the short run, total revenues of each firm exceed total costs. What will happen in the long run?

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

Firms that are price takers

If factor prices rise as demand increases and the firms expand output, the long-run market supply curve will be upward sloping. In terms of economics, this describes

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

In the short run, a perfectly competitive firm will always shut down if total revenue is ____ at all positive output levels.

If marginal revenue exceeds marginal cost at the current level of output, profit will increase when output is expanded because