Exam 10: Pure Competition in the Short Run

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 200 units is $4.00. The average variable cost is $3.50. The market price of the product is $3.00. To maximize profits or minimize losses, the firm should

An industry comprising 40 firms, none of which has more than 3 percent of the total market for a differentiated product, is an example of

In the short run, a competitive firm will always choose to shut down if product price is less than the lowest attainable average total cost.

Which of the following is not a basic characteristic of pure competition?

The MR = MC rule can be restated for a purely competitive seller as P = MC because

Average revenue and marginal revenue are equal at each output level in

If a profit-seeking competitive firm is producing its profit-maximizing output and its total fixed costs fall by 25 percent, the firm should

Average revenue is conceptually equivalent to the

The basic difference between pure competition and monopolistic competition is in the number of firms in the industry.

(Consider This) An otherwise unprofitable motel located on a largely abandoned roadway might be able to stay open for several years by

Oligopoly firms may produce either standardized or differentiated products.

Assume a purely competitive firm is selling 200 units of output at $3 each. At this output, its total fixed cost is $100 and its total variable cost is $350. This firm

A purely competitive firm is currently in short-run equilibrium and its MC exceeds its ATC at its current output level. It can be concluded that

If the firm produces an output level below its break-even point, then the firm will earn negative economic profits.

In pure competition, price is determined where the industry

Local electric or gas utility companies mostly operate in which market structure?

In which market model are the conditions of entry into the market easiest?

The term imperfect competition refers to every market structure besides pure competition.

In pure competition, a competitive firm's supply curve is that section of its marginal cost curve above ATC, and at any price below the average cost, the firm will produce nothing.

If a purely competitive firm is producing at the P = MC output and realizing an economic profit, at that output