Exam 10: Pure Competition in the Short Run

Assume for a competitive firm that MC = AVC at $12,MC = ATC at $20,and MC = MR at $16.This firm will:

Suppose that at 500 units of output marginal revenue is equal to marginal cost.The firm is selling its output at $5 per unit and average total cost at 500 units of output is $6.On the basis of this information,we:

DASH Airlines is considering the addition of a flight from Red Cloud to David City.The total cost of the flight would be $1,100,of which $800 are fixed costs already incurred.Expected revenues from the flight are $600.DASH should:

The Ajax Manufacturing Company is selling in a purely competitive market.Its output is 100 units,which sell at $4 each.At this level of output total cost is $600,total fixed cost is $100,and marginal cost is $4.The firm should:

The short-run supply curve of a purely competitive producer is based primarily on its:

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.At 3 units of output,total variable cost is ____ and total cost is ____.

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.Given the $75 product price,at its optimal output the firm will:

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.Assuming total fixed costs equal to zero,the firm's:

Suppose you find that the price of your product is less than minimum AVC.You should:

In the short run,a purely competitive firm will earn a normal profit when:

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 $68.10,it will produce:

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

Which of the following is characteristic of a purely competitive seller's demand curve?

Marginal revenue is the addition to total revenue resulting from the sale of one more unit of output.

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 an average total cost of: