Exam 9: Price Takers and the Competitive Process

Use the figure to answer the following question(s). Figure 9-6 When the market price in Figure 9-6 is $20, the firm's maximum profit will be approximately

In the absence of government regulation, which of the following products would most closely fit the competitive price-taker (purely competitive) model?

Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive price-taker market. Table 9-1 Refer to Table 9-1. If the market price of tomatoes rose to $570 per ton, how many tons per month would the Tuckers produce if they were maximizing profit?

Use the figure to answer the following question(s). Figure 9-8 The average total cost ( ATC ) and marginal costs ( MC ) of a firm producing in a price-taker industry are depicted in Figure 9-8. If the current market price of the firm's product is $3, what output should this firm produce per day?

If the expansion of output in an industry leads to unchanged resource prices, the industry is most likely to be

When a firm in a price-taker industry is in long-run equilibrium, the market price equals

A firm in a price-taker market

In the short run, a profit-maximizing firm in a price-taker market will definitely stop production if

To maximize profits, a firm should always produce the level of output where

When the marginal cost of a price-taker firm is more than the market price of its product, the firm should

The figure depicts a firm in a price-taker market. Use this figure to answer the following question(s). Figure 9-19 Refer to Figure 9-19. At the profit-maximizing level of output, the firm will earn an economic

In a price-taker market, the short-run market supply curve is the

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

Suppose product price is $24; MR = MC at Q = 200; AFC = $6; AVC = $16. What do you advise this competitive price-taker firm to do?

The competitive market process tends to promote economic prosperity because it

Farmer Fanny sells her crops in a competitive price-taker market. If she produces 500 bushels for total revenue of $2,500 and if harvesting the 501st bushel would raise her total cost from $2,500 to $2,505, her

Suppose antitheft auto alarms are produced in a price-taker market that is initially in long-run equilibrium. It is estimated that only 23 percent of all autos have alarms. Due to rising auto theft, Congress mandates alarms in every vehicle. Assume complete compliance. If the industry is an increasing cost industry, price will

Fun Time Inc. uses the same property and equipment to provide skiing services for six months during the winter and mountain roller boarding for six months during the summer. Monthly revenue and cost figures during the summer and winter months for Fun Time are shown below. Fun Time's $1,000 monthly fixed costs will be incurred as long as it remains in business. Which of the following should Fun Time do if it wants to maximize its annual profit?

Scenario 9-1 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. Refer to Scenario 9-1. To maximize its profit, the firm should

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