Exam 10: Pure Competition in the Short Run

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Average Average Average Total Fixed Variable Total Marginal Output Cost Cost Cost Cost 1 \ 150.00 \ 25.00 \ 175.00 \ 25.00 2 75.00 23.00 98.00 21.00 3 50.00 20.00 70.00 14.00 4 37.50 21.00 58.50 24.00 5 30.00 23.00 53.00 31.00 6 25.00 25.00 50.00 35.00 7 21.43 28.00 49.43 46.01 8 18.75 33.00 51.76 68.07 9 16.67 39.00 55.67 86.95 10 15.00 48.00 63.00 128.97 Refer to the data.If the market price for this firm's product is $87,it will produce:

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

Answer the question on the basis of the following cost data for a purely competitive seller: Total Total Fixed Output Cost 0 \5 0 1 50 2 50 3 50 4 50 5 50 6 50 Total Variable Total Cost Cost \ 0 \ 50 70 120 120 170 150 200 220 270 300 350 390 440 The data are for:

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

The MR = MC rule applies:

The following table applies to a purely competitive industry composed of 100 identical firms. Quantity Quantity Demanded Price Supplied 400,000 \ 5 800,000 500,000 4 700,000 600,000 3 600,000 700,000 2 500,000 800,000 1 400,000 Refer to the table.If each of the 100 firms in the industry is maximizing its profit and earning only a normal profit,each must have a total cost of:

The lowest point on a purely competitive firm's short-run supply curve corresponds to:

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Average Average Average Total Fixed Variable Total Marginal Output Cost Cost Cost Cost 1 \ 150.00 \ 25.00 \ 175.00 \ 25.00 2 75.00 23.00 98.00 21.00 3 50.00 20.00 70.00 14.00 4 37.50 21.00 58.50 24.00 5 30.00 23.00 53.00 31.00 6 25.00 25.00 50.00 35.00 7 21.43 28.00 49.43 46.01 8 18.75 33.00 51.76 68.07 9 16.67 39.00 55.67 86.95 10 15.00 48.00 63.00 128.97 Refer to the data.The marginal cost column reflects:

(Last Word)Oil wells and seasonal resorts will often shut down temporarily because:

If at the MC = MR output,AVC exceeds price:

Answer the question on the basis of the following cost data for a purely competitive seller: Total Total Fixed Output Cost 0 \5 0 1 50 2 50 3 50 4 50 5 50 6 50 Total Variable Total Cost Cost \ 0 \ 50 70 120 120 170 150 200 220 270 300 350 390 440 Refer to the data.At 5 units of output,average fixed cost,average variable cost,and average total cost are:

Although individual purely competitive firms can influence the price of their product,these firms as a group cannot influence market price.

Answer the question on the basis of the following data confronting a firm: Marginal Output Reven 0 -- 1 \ 16 2 16 3 16 4 16 5 16 Marginal Cost -- \ 10 9 13 17 21 Refer to the data.At the profit-maximizing output,the firm's total revenue is:

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Average Average Average Total Fixed Variable Total Marginal Output Cost Cost Cost Cost 1 \ 150.00 \ 25.00 \ 175.00 \ 25.00 2 75.00 23.00 98.00 21.00 3 50.00 20.00 70.00 14.00 4 37.50 21.00 58.50 24.00 5 30.00 23.00 53.00 31.00 6 25.00 25.00 50.00 35.00 7 21.43 28.00 49.43 46.01 8 18.75 33.00 51.76 68.07 9 16.67 39.00 55.67 86.95 10 15.00 48.00 63.00 128.97 Refer to the data.We can infer that,at zero output,this firm's total fixed,total variable,and total costs are:

A firm finds that at its MR = MC output,its TC = $1,000,TVC = $800,TFC = $200,and total revenue is $900.This firm should:

A purely competitive seller should produce (rather than shut down)in the short run:

Answer the question on the basis of the following cost data for a purely competitive seller: Output Total Cost 0 \ 50 1 90 2 120 3 140 4 170 5 210 6 260 7 330 Refer to the data.If product price is $45,the firm will:

In the short run,a purely competitive firm will always make an economic profit if:

A competitive firm will produce in the short run so long as its price exceeds its average fixed cost.

Assume the XYZ Corporation is producing 20 units of output.It is selling this output in a purely competitive market at $10 per unit.Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output.This corporation: