Exam 9: Price Takers and the Competitive Process

Use the figure to answer the following question(s). Figure 9-11 If the current market price for the firm depicted in Figure 9-11 is A , given the firm's cost conditions, which output should it produce?

If a competitive price-taker firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then

For a firm in a price-taker market, the firm's demand curve is

If price is above average variable cost and below average total cost, a profit-maximizing price taker should

Competitive price-taker firms respond to changing market conditions by varying their

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

If the demand and marginal revenue curves confronting firm A are identical, it may be concluded that firm A is a

In short-run equilibrium, a competitive price-taker firm

If a technological advance lowers a firm's production costs, why do prices typically fall? Shouldn't the firm maintain the same price and earn economic profit?

When a firm in a competitive market is earning profits, this indicates that the firm is

In a constant cost industry,

The dynamic process of competition

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?

Firms that can choose what price they will charge for their product and can increase the number of units sold by reducing price are called

Suppose product price is fixed at $24; MR = MC at Q = 200; AFC = $6; AVC = $25. What do you advise this firm to do?

Figure 9-1 Figure 9-1 shows the marginal and average total cost curves for a firm producing product A. What would be the minimum price this firm could charge and still continue to supply A to the market in the long run?

If the demand and marginal revenue curves confronting firm A are identical, it may be concluded that firm A is a