Exam 12: Perfect Competition

Use the table below to answer the following questions. Table 12.2.1 -Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The marginal cost of increasing production from 4 units to 5 units is

Use the table below to answer the following questions. Table 12.2.3 -Refer to Table 12.2.3, which gives the total cost schedule for Brenda's Balloon Shop, a perfectly competitive firm.The average fixed cost of producing the 4th balloon is

Consumer surplus

Use the information below to answer the following questions. Fact 12.4.2 Exxon Mobil Selling All Its Retail Gas Stations Exxon Mobil is not alone among Big Oil exiting the retail gas business, a market where profits have gotten tougher as crude oil prices have risen. Gas station owners say they're struggling to turn a profit because while wholesale gasoline prices have risen sharply, they've been unable to raise pump prices fast enough to keep pace. Source: Houston Chronicle, June 12, 2008 -Refer to Fact 12.4.2.Exxon Mobil is making ________ decision in the retail gasoline market. This decision maximizes Exxon Mobil's economic profit if ________.

Economic profit equals

Use the information below to answer the following questions. Fact 12.2.1 Chevy Volt Production Temporarily Shut Down GM will temporarily lay off 1,300 employees as the company stops production of the electric car, Chevy Volt, for five weeks. GM had hoped to sell 10,000 Volts last year, but ended up selling just 7,671. It plans to maintain inventory levels by adjusting production to match demand. Source: Politico, March 2, 2012 -Refer to Fact 12.2.1.The shutdown decision maximizes GM's economic profit (or minimizes its loss)when price is less than

When a firm is a "price taker," the firm

Use the figure below to answer the following questions. Figure 12.4.3 -Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market.In the long run, market

Assume that the leather market is a perfectly competitive market.The market demand curve for leather is ________ and each individual leather producer's demand curve is ________.

Use the table below to answer the following questions. Table 12.2.1 -Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The short-run equilibrium price of one unit of the good is

Use the figure below to answer the following question. Figure 12.3.4 -Refer to Figure 12.3.4, which shows cost curves of Paul's Picture Frames Inc.The picture frame market is perfectly competitive and the market price is $12 a frame.Paul produces ________ frames each week and makes ________ total revenue.

In a perfectly competitive market, the market price is $8.An individual firm is producing the output at which MC = $8.AVC at that output is $10.What should the firm do to maximize its economic profit in the short run?

Use the figure below to answer the following questions. Figure 12.1.1 -Refer to Figure 12.1.1. The firm competes in a perfectly competitive market.Curve A is a straight line because the firm

Use the table below to answer the following question. Table 12.2.4 -Refer to Table 12.2.4.The market is perfectly competitive and there are 1,000 firms that produce paper. The top table sets out the market demand schedule for paper. Each producer of paper has the costs shown in the bottom table when it uses its least-cost plant size. The market price is ________ a box and the market output is ________ boxes. The output produced by each firm is ________ boxes.Each firm ________.

Use the figure below to answer the following question. Figure 12.3.5 -Refer to Figure 12.3.5, which shows the cost curves and the marginal revenue curve for a perfectly competitive firm.To maximize its profit, the firm produces ________ units of output and the price is ________ a unit.

Use the table below to answer the following questions. Table 12.1.1 -Refer to Table 12.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 6 units of output, marginal revenue is

Use the figure below to answer the following questions. Figure 12.3.1 -Refer to Figure 12.3.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.In the short run, the firm will

Use the information below to answer the following questions. Fact 12.4.2 Exxon Mobil Selling All Its Retail Gas Stations Exxon Mobil is not alone among Big Oil exiting the retail gas business, a market where profits have gotten tougher as crude oil prices have risen. Gas station owners say they're struggling to turn a profit because while wholesale gasoline prices have risen sharply, they've been unable to raise pump prices fast enough to keep pace. Source: Houston Chronicle, June 12, 2008 -Refer to Fact 12.4.2.Exxon Mobil's decision will ________ economic profit of other gasoline retailers, everything else remaining the same.

Use the table below to answer the following questions. Table 12.2.2 -Refer to Table 12.2.2, which gives the total cost schedule for Chip's Pizza Palace, a perfectly competitive firm.If Chip shuts down in the short run, his total cost is

Use the figure below to answer the following questions. Figure 12.1.1 -Refer to Figure 12.1.1.The firm competes in a perfectly competitive market.Curve A represents the firm's