Exam 9: Price Takers and the Competitive Process

Several producers in industry A developed an improved technology that reduces the quantity of resources used to produce a given output. Which of the following would be expected?

Which of the following best describes the series of events shown in the figure? The original conditions prior to the change are shown by D ₀ and S ₀ (point A), and S _LR is the market long-run supply curve.

When competition is present, self-interested business decision makers have a strong incentive to

Regardless of quantity in long-run equilibrium, the competitive price-taker market price cannot exceed the

Which of the following products would most closely fit the competitive price-taker model?

If the market price in a price-taking industry was currently above the average total cost of production for firms in the industry,

If a single firm in a price-taker market lowers its price below the market equilibrium price,

If marginal revenue exceeds marginal cost, a price-taker firm should

When market conditions in a price-taker market are such that firms cannot cover their production costs,

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

When firms in a price-taker market are temporarily able to charge prices that exceed their production costs,

Competitive price-taker markets are characterized by

The dynamic process of competition

You are the owner of an ice cream shop that earns a profit most of the year except during the cold winter months. During the month of December, your rent and other fixed costs amount to a total of $200. If you remain open, your total variable costs (workers, ice cream cones, etc.) will amount to $300. If you would be able to sell 100 ice cream cones at $4 each during December, then

The short-run supply curve in a price-taking industry is the

When new firms have an incentive to enter a competitive price-taker market, their entry will

Suppose Thelma and Louise both sell fried green tomatoes in a competitive price-taker market. If Louise increases her output,

The market for a competitive price-taker market clears at a price of $3, and the minimum average cost for all firms is $2.50. In the long run, we would expect an increase in

If a firm is losing money, this implies that

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