Exam 8: A: Perfect Competition

NARRBEGIN: Exhibit 8-1-1 Exhibit 8-1 -The perfectly competitive firewood market is composed of 1,000 identical consumers and 1,000 identical firms. Exhibit 8-1 shows cost data for one firm and demand data for one consumer. How many cords of firewood wil be bought and sold in equilibrium?

If a firm is producing at an output where the total revenue curve crosses the total cost curve,

Many auction markets

NARRBEGIN: Exhibit 8-10 Exhibit 8-10 -At the profit-maximizing output level, the firm represented in Exhibit 8-10 experiences

If average revenue equals average total cost,

Long-run equilibrium for a perfectly competitive firm occurs when

Firms in perfect competition have no control over

A Midwestern wheat farmer faces a horizontal demand curve because

Marginal revenue is the change in total revenue from selling one more unit of output.

After an increase in demand in a constant-cost industry, firms will find themselves with higher average cost curves.

NARRBEGIN: Exhibit 8-7 Exhibit 8-7 -For the profit maximizing perfectly competitive firm represented in Exhibit 8-7, which of the following is true?

NARRBEGIN: Exhibit 8-5-1 Exhibit 8-5 -Consider Exhibit 8-5. If the market price is $15, the minimum loss this perfectly competitive firm can incur is

NARRBEGIN: Exhibit 8-18-1 Exhibit 8-18 -Assuming all of the firms are identical, how many firms are in the industry before and after the demand shift depicted in Exhibit 8-18?

Commodity products are

If price is less than its minimum average variable cost, a perfectly competitive firm that continues to produce in the short run

If a market is such that, at the market equilibrium quantity, the benefit of the last unit produced just equals its marginal cost

Marginal revenue is the change in total revenue from using one more unit of an input in the short run.

If a perfectly competitive firm charges the market price of $14 per unit,

Producer surplus is usually less than profit

Farmer Fanny sells her crops in a perfectly competitive market. If she produces 500 bushels for total revenue of $2,500 and if harvesting the 501st bushel would raise her total cost from $2,500 to $2,505, her