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Deck 11: Managerial Decisions in Competitive Markets
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Question
refer to the following figure:
The figure above shows cost curves for a perfectly competitive firm.
-A profit-maximizing firm will break even when market price is:
A) $ 0.60
B) $ 0.80
C) $1.50
D) $1.60
The figure above shows cost curves for a perfectly competitive firm.-A profit-maximizing firm will break even when market price is:
A) $ 0.60
B) $ 0.80
C) $1.50
D) $1.60
Question
refer to the following figure:
The graph on the left shows long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for an increasing-cost industry.
-How much profit will the firm earn?
A) zero
B) $2,600
C) $3,100
D) $3,750
E) $6,000
The graph on the left shows long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for an increasing-cost industry.-How much profit will the firm earn?
A) zero
B) $2,600
C) $3,100
D) $3,750
E) $6,000
Question
refer to the following:
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
where P is price, M is income, and 
is the price of a key input. The forecasts for the next year are 
= $15,000 and 
= $20. Average variable cost is estimated to be 
Total fixed cost will be $6,000 next year.
-What is the firm's minimum average variable cost?
A) $ 2
B) $ 6
C) $ 8
D) $20
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
where P is price, M is income, and is the price of a key input. The forecasts for the next year are = $15,000 and = $20. Average variable cost is estimated to be Total fixed cost will be $6,000 next year.-What is the firm's minimum average variable cost?
A) $ 2
B) $ 6
C) $ 8
D) $20
Question
refer to the following:
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: where P is price, M is income, and is the price of a key input. The forecasts for the next year are = $15,000 and = $20. Average variable cost is estimated to be Total fixed cost will be $6,000 next year.
-What is the profit-maximizing output choice for the firm?
A) 3,000 units
B) 4,000 units
C) 5,000 units
D) 6,000 units
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
where P is price, M is income, and is the price of a key input. The forecasts for the next year are = $15,000 and = $20. Average variable cost is estimated to be Total fixed cost will be $6,000 next year.-What is the profit-maximizing output choice for the firm?
A) 3,000 units
B) 4,000 units
C) 5,000 units
D) 6,000 units
Question
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: 
where Q is quantity, P is the price of the product, M is income, and 
is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and 
for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-What is the price forecast for 2009?
A) $2
B) $2.50
C) $2.75
D) $3
E) none of the above
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-What is the price forecast for 2009?
A) $2
B) $2.50
C) $2.75
D) $3
E) none of the above
Question
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-Average variable cost reaches its minimum value of _____ units of output.
A) 1,000
B) 1,500
C) 2,000
D) 2,500
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-Average variable cost reaches its minimum value of _____ units of output.
A) 1,000
B) 1,500
C) 2,000
D) 2,500
Question
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The minimum value of average variable cost is $_____.
A) $0.50
B) $0.75
C) $0.975
D) $1.00
E) $2.15
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The minimum value of average variable cost is $_____.
A) $0.50
B) $0.75
C) $0.975
D) $1.00
E) $2.15
Question
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The manager _____ produce since _____________.
A) should; $3 > $0.975
B) should; $2.75 > $0.75
C) should not; $2 < $2.15
D) should not; $0.50 < $1.00
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The manager _____ produce since _____________.
A) should; $3 > $0.975
B) should; $2.75 > $0.75
C) should not; $2 < $2.15
D) should not; $0.50 < $1.00
Question
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The marginal cost function is:
A) SMC = 3.0 - 0.0027Q + 0.0000009Q2
B) SMC = 3.0 - 0.00135Q + 0.00000045Q2
C) SMC = 3.0Q -0.0027Q2 + 0.0000009Q3
D) SMC = 3.0 - 0.0054Q + 0.0000018Q2
E) none of the above
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The marginal cost function is:
A) SMC = 3.0 - 0.0027Q + 0.0000009Q2
B) SMC = 3.0 - 0.00135Q + 0.00000045Q2
C) SMC = 3.0Q -0.0027Q2 + 0.0000009Q3
D) SMC = 3.0 - 0.0054Q + 0.0000018Q2
E) none of the above
Question
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The optimal level of production for the firm is
A) 1,000
B) 1,500
C) 2,000
D) 2,500
E) none of the above
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The optimal level of production for the firm is
A) 1,000
B) 1,500
C) 2,000
D) 2,500
E) none of the above
Question
Question
use the following data for a competitive industry and a price-taking firm that operates in this market.
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.
-At what level of output will Bartech's average variable cost reach its minimum value?
A) 2,000 units
B) 3,000 units
C) 4,000 units
D) 5,000 units
E) 6,000 units
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.-At what level of output will Bartech's average variable cost reach its minimum value?
A) 2,000 units
B) 3,000 units
C) 4,000 units
D) 5,000 units
E) 6,000 units
Question
use the following data for a competitive industry and a price-taking firm that operates in this market.
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.
-What is the minimum average variable cost?
A) $0
B) $5.50
C) $6.00
D) $6.50
E) $7.00
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.-What is the minimum average variable cost?
A) $0
B) $5.50
C) $6.00
D) $6.50
E) $7.00
Question
Question
Use the following information
Radon Research Corporation (RRC) is one of 24 firms in Albuquerque testing homes for dangerous levels of radon gas. There is a standard test that all testing companies use. The manager of RRC wants to know the number of homes to test in 2009 in order to maximize the firm's profit. The manager forecasted a price of $160 for radon tests in 2009.
The firm's marginal cost was estimated as
where Q is the number of tests performed each week. RRC's fixed cost will be $250 per week.
-The weekly profit (loss) at RRC in 2009 will be
A) $121
B) $320
C) $86 -$61
D)-$121
Radon Research Corporation (RRC) is one of 24 firms in Albuquerque testing homes for dangerous levels of radon gas. There is a standard test that all testing companies use. The manager of RRC wants to know the number of homes to test in 2009 in order to maximize the firm's profit. The manager forecasted a price of $160 for radon tests in 2009.
The firm's marginal cost was estimated as
where Q is the number of tests performed each week. RRC's fixed cost will be $250 per week.-The weekly profit (loss) at RRC in 2009 will be
A) $121
B) $320
C) $86 -$61
D)-$121
Question
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-Average variable cost at Sport Tee is
A) 12 - 0.01Q + 0.0000024Q2
B) 12 - 0.0025Q + 0.000000266Q2
C) 12 - 0.0001Q + 0.000001Q2
D) 12Q - 0.0025Q2 + 0.000000266Q3
E) none of the above
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-Average variable cost at Sport Tee is
A) 12 - 0.01Q + 0.0000024Q2
B) 12 - 0.0025Q + 0.000000266Q2
C) 12 - 0.0001Q + 0.000001Q2
D) 12Q - 0.0025Q2 + 0.000000266Q3
E) none of the above
Question
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-To maximize profit how many T-shirts should be produced and sold each month?
A) 1,000
B) 2,000
C) 3,000
D) 4,000
E) 5,000
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-To maximize profit how many T-shirts should be produced and sold each month?
A) 1,000
B) 2,000
C) 3,000
D) 4,000
E) 5,000
Question
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-At the profit-maximizing level of output total revenue will be
A) $10,000
B) $15,000
C) $20,000
D) $25,000
E) $35,000
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-At the profit-maximizing level of output total revenue will be
A) $10,000
B) $15,000
C) $20,000
D) $25,000
E) $35,000
Question
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-Monthly profit will be
A)-$2,000
B)-$1,150
C) $4,250
D) $3,400
E) $2,250
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-Monthly profit will be
A)-$2,000
B)-$1,150
C) $4,250
D) $3,400
E) $2,250
Question
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-A perfectly competitive firm's demand is ____________ elastic and equal to ____________ which is equal to ____________.
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-A perfectly competitive firm's demand is ____________ elastic and equal to ____________ which is equal to ____________.
Question
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm produces ____________ units of output. Total revenue is $____________ and total cost is $____________.
The price of the product is $35.
-The firm produces ____________ units of output. Total revenue is $____________ and total cost is $____________.
Question
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
The price of the product is $20.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
The price of the product is $20.
Question
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm produces ______ units of output. Total revenue is $____________ and total cost is $____________.
The price of the product is $35.
-The firm produces ______ units of output. Total revenue is $____________ and total cost is $____________.
Question
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
Question
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm's total revenue at a price of $20 covers all of its variable cost, and the firm has $____________ left to apply toward paying its ________________________. If the firm shuts down and produces nothing it would lose an amount equal to its _________________
The price of the product is $35.
-The firm's total revenue at a price of $20 covers all of its variable cost, and the firm has $____________ left to apply toward paying its ________________________. If the firm shuts down and produces nothing it would lose an amount equal to its _________________
Question
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-At any price below (approximately) $_________, the firm would shut down.
The price of the product is $35.
-At any price below (approximately) $_________, the firm would shut down.
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The following graph showing a perfectly competitive firm's long-run cost curves.
-If price is $70, the firm will produce __________ units of output.
-If price is $70, the firm will produce __________ units of output.
Question
The following graph showing a perfectly competitive firm's long-run cost curves.
-If price is $70, total revenue will be $__________ and total cost will be $__________.
-If price is $70, total revenue will be $__________ and total cost will be $__________.
Question
The following graph showing a perfectly competitive firm's long-run cost curves.
-If price is $70, the firm makes $__________ economic profit.
-If price is $70, the firm makes $__________ economic profit.
Question
The following graph showing a perfectly competitive firm's long-run cost curves.
-In long-run competitive equilibrium, the firm will produce __________ units of output and sell them at a price of $________ if this is a constant cost industry.
-In long-run competitive equilibrium, the firm will produce __________ units of output and sell them at a price of $________ if this is a constant cost industry.
Question
The following graph showing a perfectly competitive firm's long-run cost curves.
-In long-run equilibrium, the firm's economic profit is $_________.
-In long-run equilibrium, the firm's economic profit is $_________.
Question
The following figure shows a competitive firm's ARP and MRP curves.
-If the wage rate is $20, how many workers will the firm hire? ________.
-If the wage rate is $20, how many workers will the firm hire? ________.
Question
The following figure shows a competitive firm's ARP and MRP curves.
-If the wage rate is $30, how many workers will the firm hire? ________.
-If the wage rate is $30, how many workers will the firm hire? ________.
Question
The following figure shows a competitive firm's ARP and MRP curves.
-If the wage is $60, how many workers will the firm hire? ________. How much output will the firm produce? ________.
-If the wage is $60, how many workers will the firm hire? ________. How much output will the firm produce? ________.
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A competitive firm estimates its average variable cost function to be . 
The firm's total fixed cost is $3,500.
-The marginal cost function associated with this average variable cost function is
SMC =__________________________.
The firm's total fixed cost is $3,500.-The marginal cost function associated with this average variable cost function is
SMC =__________________________.
Question
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-AVC reaches its minimum at ______units of output. Minimum AVC is $_________.
The firm's total fixed cost is $3,500.-AVC reaches its minimum at ______units of output. Minimum AVC is $_________.
Question
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-Suppose the price of the product is P = $125. The firm should produce _________ units of output. The firm earns a profit (loss) of $__________________.
The firm's total fixed cost is $3,500.-Suppose the price of the product is P = $125. The firm should produce _________ units of output. The firm earns a profit (loss) of $__________________.
Question
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-Suppose the price of the product is P = $115. The firm should now produce _________ units of output. Its profit (loss) will be $_________.
The firm's total fixed cost is $3,500.-Suppose the price of the product is P = $115. The firm should now produce _________ units of output. Its profit (loss) will be $_________.
Question
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-Suppose the price of the product falls to P = $100. The firm should produce _________ units of output. Its profit (loss) will be $____________.
The firm's total fixed cost is $3,500.-Suppose the price of the product falls to P = $100. The firm should produce _________ units of output. Its profit (loss) will be $____________.
Question
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-The marginal cost function associated with this AVC function is
SMC = ________________.
Its total fixed cost is $500.-The marginal cost function associated with this AVC function is
SMC = ________________.
Question
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-AVC reaches its minimum at _________ units of output at which AVC = $__________.
The forecasted price is P = $23.60.
Its total fixed cost is $500.-AVC reaches its minimum at _________ units of output at which AVC = $__________.
The forecasted price is P = $23.60.
Question
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-To maximize its profit the firm should produce ___________ units of output. Profit (loss) is $____________.
Suppose the forecasted price is P = $14.94.
Its total fixed cost is $500.-To maximize its profit the firm should produce ___________ units of output. Profit (loss) is $____________.
Suppose the forecasted price is P = $14.94.
Question
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-To maximize its profit, the firm should produce ___________ units of output. Profit (loss) is $__________.
Suppose the forecasted price is P = $10.
Its total fixed cost is $500.-To maximize its profit, the firm should produce ___________ units of output. Profit (loss) is $__________.
Suppose the forecasted price is P = $10.
Question
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-The firm should produce ____________ units of output for a profit (loss) of $____________.
Its total fixed cost is $500.-The firm should produce ____________ units of output for a profit (loss) of $____________.
Question
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-The long-run marginal cost of producing the 20,000th unit of output is $________.
-The long-run marginal cost of producing the 20,000th unit of output is $________.
Question
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-If the firms in this industry produce a total industry output of 20,000 units, every firm produces at the minimum long-run average cost of $_______ per unit and earns $________ of economic profit.
-If the firms in this industry produce a total industry output of 20,000 units, every firm produces at the minimum long-run average cost of $_______ per unit and earns $________ of economic profit.
Question
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-In long-run competitive equilibrium, the industry will produce ________ units of the good and sell these units at the market-clearing price of $______ per unit.
-In long-run competitive equilibrium, the industry will produce ________ units of the good and sell these units at the market-clearing price of $______ per unit.
Question
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-The long-run marginal cost at the equilibrium output in part c is $_______, and the long-run average cost at the equilibrium output is $_______.
-The long-run marginal cost at the equilibrium output in part c is $_______, and the long-run average cost at the equilibrium output is $_______.
Question
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-"The firms employing the superior inputs have lower costs than their rivals, but they still cannot earn any profit." Is this statement true or false?
-"The firms employing the superior inputs have lower costs than their rivals, but they still cannot earn any profit." Is this statement true or false?
Question
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-Total producer surplus in long-run competitive equilibrium is $_________ for this industry.
-Total producer surplus in long-run competitive equilibrium is $_________ for this industry.
Question
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-______________________ get the producer surplus calculated in part f.
-______________________ get the producer surplus calculated in part f.
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Deck 11: Managerial Decisions in Competitive Markets
1
refer to the following figure:
The figure above shows cost curves for a perfectly competitive firm.
-A profit-maximizing firm will break even when market price is:
A) $ 0.60
B) $ 0.80
C) $1.50
D) $1.60
The figure above shows cost curves for a perfectly competitive firm.-A profit-maximizing firm will break even when market price is:
A) $ 0.60
B) $ 0.80
C) $1.50
D) $1.60
$1.50
2
refer to the following figure:
The graph on the left shows long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for an increasing-cost industry.
-How much profit will the firm earn?
A) zero
B) $2,600
C) $3,100
D) $3,750
E) $6,000
The graph on the left shows long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for an increasing-cost industry.-How much profit will the firm earn?
A) zero
B) $2,600
C) $3,100
D) $3,750
E) $6,000
$6,000
3
refer to the following:
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: where P is price, M is income, and is the price of a key input. The forecasts for the next year are = $15,000 and = $20. Average variable cost is estimated to be Total fixed cost will be $6,000 next year.
-What is the firm's minimum average variable cost?
A) $ 2
B) $ 6
C) $ 8
D) $20
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
where P is price, M is income, and is the price of a key input. The forecasts for the next year are = $15,000 and = $20. Average variable cost is estimated to be Total fixed cost will be $6,000 next year.-What is the firm's minimum average variable cost?
A) $ 2
B) $ 6
C) $ 8
D) $20
$ 6
4
refer to the following:
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: where P is price, M is income, and is the price of a key input. The forecasts for the next year are = $15,000 and = $20. Average variable cost is estimated to be Total fixed cost will be $6,000 next year.
-What is the profit-maximizing output choice for the firm?
A) 3,000 units
B) 4,000 units
C) 5,000 units
D) 6,000 units
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
where P is price, M is income, and is the price of a key input. The forecasts for the next year are = $15,000 and = $20. Average variable cost is estimated to be Total fixed cost will be $6,000 next year.-What is the profit-maximizing output choice for the firm?
A) 3,000 units
B) 4,000 units
C) 5,000 units
D) 6,000 units
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5
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-What is the price forecast for 2009?
A) $2
B) $2.50
C) $2.75
D) $3
E) none of the above
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-What is the price forecast for 2009?
A) $2
B) $2.50
C) $2.75
D) $3
E) none of the above
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6
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-Average variable cost reaches its minimum value of _____ units of output.
A) 1,000
B) 1,500
C) 2,000
D) 2,500
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-Average variable cost reaches its minimum value of _____ units of output.
A) 1,000
B) 1,500
C) 2,000
D) 2,500
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7
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The minimum value of average variable cost is $_____.
A) $0.50
B) $0.75
C) $0.975
D) $1.00
E) $2.15
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The minimum value of average variable cost is $_____.
A) $0.50
B) $0.75
C) $0.975
D) $1.00
E) $2.15
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8
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The manager _____ produce since _____________.
A) should; $3 > $0.975
B) should; $2.75 > $0.75
C) should not; $2 < $2.15
D) should not; $0.50 < $1.00
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The manager _____ produce since _____________.
A) should; $3 > $0.975
B) should; $2.75 > $0.75
C) should not; $2 < $2.15
D) should not; $0.50 < $1.00
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9
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The marginal cost function is:
A) SMC = 3.0 - 0.0027Q + 0.0000009Q2
B) SMC = 3.0 - 0.00135Q + 0.00000045Q2
C) SMC = 3.0Q -0.0027Q2 + 0.0000009Q3
D) SMC = 3.0 - 0.0054Q + 0.0000018Q2
E) none of the above
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The marginal cost function is:
A) SMC = 3.0 - 0.0027Q + 0.0000009Q2
B) SMC = 3.0 - 0.00135Q + 0.00000045Q2
C) SMC = 3.0Q -0.0027Q2 + 0.0000009Q3
D) SMC = 3.0 - 0.0054Q + 0.0000018Q2
E) none of the above
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10
refer to the following:
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand: Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009:
The manager also estimates the average variable cost function to be
Total fixed costs will be $2,000 in 2009.
-The optimal level of production for the firm is
A) 1,000
B) 1,500
C) 2,000
D) 2,500
E) none of the above
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be:
Demand:
Supply: where Q is quantity, P is the price of the product, M is income, and is the input price. The manager of the perfectly competitive firm uses time-eries data to obtain the following forecasted values of M and for 2009: The manager also estimates the average variable cost function to be Total fixed costs will be $2,000 in 2009.-The optimal level of production for the firm is
A) 1,000
B) 1,500
C) 2,000
D) 2,500
E) none of the above
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11
Deep Check
-The profit (loss) is
A) $2,600
B) $2,000
C) $4,000
D) $3,250
E) none of the above
-The profit (loss) is
A) $2,600
B) $2,000
C) $4,000
D) $3,250
E) none of the above
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12
use the following data for a competitive industry and a price-taking firm that operates in this market.
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.
-At what level of output will Bartech's average variable cost reach its minimum value?
A) 2,000 units
B) 3,000 units
C) 4,000 units
D) 5,000 units
E) 6,000 units
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.-At what level of output will Bartech's average variable cost reach its minimum value?
A) 2,000 units
B) 3,000 units
C) 4,000 units
D) 5,000 units
E) 6,000 units
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13
use the following data for a competitive industry and a price-taking firm that operates in this market.
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.
-What is the minimum average variable cost?
A) $0
B) $5.50
C) $6.00
D) $6.50
E) $7.00
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2009. Bartech's average variable cost function in 2005 is estimated to be
Bartech expects to face fixed costs of $12,000 in 2009.-What is the minimum average variable cost?
A) $0
B) $5.50
C) $6.00
D) $6.50
E) $7.00
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14
suppose that the 2009 price forecast is drastically revised downward to $5.
-What is Bartech's profit-maximizing (or loss-minimizing) output for 2009?
A) 0 units
B) 1,000 units
C) 2,000 units
D) 3,000 units
E) 4,000 units
-What is Bartech's profit-maximizing (or loss-minimizing) output for 2009?
A) 0 units
B) 1,000 units
C) 2,000 units
D) 3,000 units
E) 4,000 units
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15
Use the following information
Radon Research Corporation (RRC) is one of 24 firms in Albuquerque testing homes for dangerous levels of radon gas. There is a standard test that all testing companies use. The manager of RRC wants to know the number of homes to test in 2009 in order to maximize the firm's profit. The manager forecasted a price of $160 for radon tests in 2009.
The firm's marginal cost was estimated as
where Q is the number of tests performed each week. RRC's fixed cost will be $250 per week.
-The weekly profit (loss) at RRC in 2009 will be
A) $121
B) $320
C) $86 -$61
D)-$121
Radon Research Corporation (RRC) is one of 24 firms in Albuquerque testing homes for dangerous levels of radon gas. There is a standard test that all testing companies use. The manager of RRC wants to know the number of homes to test in 2009 in order to maximize the firm's profit. The manager forecasted a price of $160 for radon tests in 2009.
The firm's marginal cost was estimated as
where Q is the number of tests performed each week. RRC's fixed cost will be $250 per week.-The weekly profit (loss) at RRC in 2009 will be
A) $121
B) $320
C) $86 -$61
D)-$121
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16
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-Average variable cost at Sport Tee is
A) 12 - 0.01Q + 0.0000024Q2
B) 12 - 0.0025Q + 0.000000266Q2
C) 12 - 0.0001Q + 0.000001Q2
D) 12Q - 0.0025Q2 + 0.000000266Q3
E) none of the above
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-Average variable cost at Sport Tee is
A) 12 - 0.01Q + 0.0000024Q2
B) 12 - 0.0025Q + 0.000000266Q2
C) 12 - 0.0001Q + 0.000001Q2
D) 12Q - 0.0025Q2 + 0.000000266Q3
E) none of the above
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17
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-To maximize profit how many T-shirts should be produced and sold each month?
A) 1,000
B) 2,000
C) 3,000
D) 4,000
E) 5,000
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-To maximize profit how many T-shirts should be produced and sold each month?
A) 1,000
B) 2,000
C) 3,000
D) 4,000
E) 5,000
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18
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-At the profit-maximizing level of output total revenue will be
A) $10,000
B) $15,000
C) $20,000
D) $25,000
E) $35,000
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-At the profit-maximizing level of output total revenue will be
A) $10,000
B) $15,000
C) $20,000
D) $25,000
E) $35,000
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19
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-Monthly profit will be
A)-$2,000
B)-$1,150
C) $4,250
D) $3,400
E) $2,250
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-Monthly profit will be
A)-$2,000
B)-$1,150
C) $4,250
D) $3,400
E) $2,250
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20
Use the following information
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-A perfectly competitive firm's demand is ____________ elastic and equal to ____________ which is equal to ____________.
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive? The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is
where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.-A perfectly competitive firm's demand is ____________ elastic and equal to ____________ which is equal to ____________.
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21
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm produces ____________ units of output. Total revenue is $____________ and total cost is $____________.
The price of the product is $35.
-The firm produces ____________ units of output. Total revenue is $____________ and total cost is $____________.
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22
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
The price of the product is $20.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
The price of the product is $20.
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23
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm produces ______ units of output. Total revenue is $____________ and total cost is $____________.
The price of the product is $35.
-The firm produces ______ units of output. Total revenue is $____________ and total cost is $____________.
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24
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
The price of the product is $35.
-The firm makes a profit (loss) of $____________.
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25
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-The firm's total revenue at a price of $20 covers all of its variable cost, and the firm has $____________ left to apply toward paying its ________________________. If the firm shuts down and produces nothing it would lose an amount equal to its _________________
The price of the product is $35.
-The firm's total revenue at a price of $20 covers all of its variable cost, and the firm has $____________ left to apply toward paying its ________________________. If the firm shuts down and produces nothing it would lose an amount equal to its _________________
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26
Use the following graph on a competitive firm's short-run cost curves to answer this question.
The price of the product is $35.
-At any price below (approximately) $_________, the firm would shut down.
The price of the product is $35.
-At any price below (approximately) $_________, the firm would shut down.
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27
In long-run competitive equilibrium, product price equals __________________ and also equals __________________. Thus, economic profit equals $___________, however, firms have not incentive to exit the industry because each firm earns enough revenue to cover all its explicit costs of operation and pay its owners an amount equal to ______________________________.
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28
Firms in a perfectly competitive industry are earning an economic profit.
-Product price will ___________ because ______________________________.
-Product price will ___________ because ______________________________.
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29
Firms in a perfectly competitive industry are earning an economic profit.
-After long-run competitive equilibrium comes about there will be ___________ (fewer, more, the same number of) firms in the industry and the industry will produce __________ (less, more, the same amount of) output.
-After long-run competitive equilibrium comes about there will be ___________ (fewer, more, the same number of) firms in the industry and the industry will produce __________ (less, more, the same amount of) output.
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30
Firms in a perfectly competitive industry are earning an economic profit.
-In long-run competitive equilibrium each firm will earn ___________ economic profit.
-In long-run competitive equilibrium each firm will earn ___________ economic profit.
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31
The following graph showing a perfectly competitive firm's long-run cost curves.
-If price is $70, the firm will produce __________ units of output.
-If price is $70, the firm will produce __________ units of output.
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32
The following graph showing a perfectly competitive firm's long-run cost curves.
-If price is $70, total revenue will be $__________ and total cost will be $__________.
-If price is $70, total revenue will be $__________ and total cost will be $__________.
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33
The following graph showing a perfectly competitive firm's long-run cost curves.
-If price is $70, the firm makes $__________ economic profit.
-If price is $70, the firm makes $__________ economic profit.
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34
The following graph showing a perfectly competitive firm's long-run cost curves.
-In long-run competitive equilibrium, the firm will produce __________ units of output and sell them at a price of $________ if this is a constant cost industry.
-In long-run competitive equilibrium, the firm will produce __________ units of output and sell them at a price of $________ if this is a constant cost industry.
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35
The following graph showing a perfectly competitive firm's long-run cost curves.
-In long-run equilibrium, the firm's economic profit is $_________.
-In long-run equilibrium, the firm's economic profit is $_________.
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36
The following figure shows a competitive firm's ARP and MRP curves.
-If the wage rate is $20, how many workers will the firm hire? ________.
-If the wage rate is $20, how many workers will the firm hire? ________.
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37
The following figure shows a competitive firm's ARP and MRP curves.
-If the wage rate is $30, how many workers will the firm hire? ________.
-If the wage rate is $30, how many workers will the firm hire? ________.
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38
The following figure shows a competitive firm's ARP and MRP curves.
-If the wage is $60, how many workers will the firm hire? ________. How much output will the firm produce? ________.
-If the wage is $60, how many workers will the firm hire? ________. How much output will the firm produce? ________.
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39
A perfectly competitive firm in the short run will
-Produce the output at which _____________________ equals __________________ and make an economic profit if price exceeds __________________.
-Produce the output at which _____________________ equals __________________ and make an economic profit if price exceeds __________________.
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40
A perfectly competitive firm in the short run will
-Produce the output at which __________________ equals __________________ and make a loss if price is between __________________ and __________________.
-Produce the output at which __________________ equals __________________ and make a loss if price is between __________________ and __________________.
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41
A perfectly competitive firm in the short run will
-Shut down if price is below ________________________ and make a loss of __________________.
-Shut down if price is below ________________________ and make a loss of __________________.
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42
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-The marginal cost function associated with this average variable cost function is
SMC =__________________________.
The firm's total fixed cost is $3,500.-The marginal cost function associated with this average variable cost function is
SMC =__________________________.
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43
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-AVC reaches its minimum at ______units of output. Minimum AVC is $_________.
The firm's total fixed cost is $3,500.-AVC reaches its minimum at ______units of output. Minimum AVC is $_________.
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44
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-Suppose the price of the product is P = $125. The firm should produce _________ units of output. The firm earns a profit (loss) of $__________________.
The firm's total fixed cost is $3,500.-Suppose the price of the product is P = $125. The firm should produce _________ units of output. The firm earns a profit (loss) of $__________________.
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45
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-Suppose the price of the product is P = $115. The firm should now produce _________ units of output. Its profit (loss) will be $_________.
The firm's total fixed cost is $3,500.-Suppose the price of the product is P = $115. The firm should now produce _________ units of output. Its profit (loss) will be $_________.
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46
A competitive firm estimates its average variable cost function to be . The firm's total fixed cost is $3,500.
-Suppose the price of the product falls to P = $100. The firm should produce _________ units of output. Its profit (loss) will be $____________.
The firm's total fixed cost is $3,500.-Suppose the price of the product falls to P = $100. The firm should produce _________ units of output. Its profit (loss) will be $____________.
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47
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-The marginal cost function associated with this AVC function is
SMC = ________________.
Its total fixed cost is $500.-The marginal cost function associated with this AVC function is
SMC = ________________.
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48
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-AVC reaches its minimum at _________ units of output at which AVC = $__________.
The forecasted price is P = $23.60.
Its total fixed cost is $500.-AVC reaches its minimum at _________ units of output at which AVC = $__________.
The forecasted price is P = $23.60.
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49
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-To maximize its profit the firm should produce ___________ units of output. Profit (loss) is $____________.
Suppose the forecasted price is P = $14.94.
Its total fixed cost is $500.-To maximize its profit the firm should produce ___________ units of output. Profit (loss) is $____________.
Suppose the forecasted price is P = $14.94.
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50
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-To maximize its profit, the firm should produce ___________ units of output. Profit (loss) is $__________.
Suppose the forecasted price is P = $10.
Its total fixed cost is $500.-To maximize its profit, the firm should produce ___________ units of output. Profit (loss) is $__________.
Suppose the forecasted price is P = $10.
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51
A competitive firm has estimated its average variable cost function as
Its total fixed cost is $500.
-The firm should produce ____________ units of output for a profit (loss) of $____________.
Its total fixed cost is $500.-The firm should produce ____________ units of output for a profit (loss) of $____________.
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52
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-The long-run marginal cost of producing the 20,000th unit of output is $________.
-The long-run marginal cost of producing the 20,000th unit of output is $________.
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53
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-If the firms in this industry produce a total industry output of 20,000 units, every firm produces at the minimum long-run average cost of $_______ per unit and earns $________ of economic profit.
-If the firms in this industry produce a total industry output of 20,000 units, every firm produces at the minimum long-run average cost of $_______ per unit and earns $________ of economic profit.
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54
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-In long-run competitive equilibrium, the industry will produce ________ units of the good and sell these units at the market-clearing price of $______ per unit.
-In long-run competitive equilibrium, the industry will produce ________ units of the good and sell these units at the market-clearing price of $______ per unit.
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55
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-The long-run marginal cost at the equilibrium output in part c is $_______, and the long-run average cost at the equilibrium output is $_______.
-The long-run marginal cost at the equilibrium output in part c is $_______, and the long-run average cost at the equilibrium output is $_______.
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56
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-"The firms employing the superior inputs have lower costs than their rivals, but they still cannot earn any profit." Is this statement true or false?
-"The firms employing the superior inputs have lower costs than their rivals, but they still cannot earn any profit." Is this statement true or false?
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57
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-Total producer surplus in long-run competitive equilibrium is $_________ for this industry.
-Total producer surplus in long-run competitive equilibrium is $_________ for this industry.
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58
The figure below shows a long-run industry supply curve (SLR) and the demand curve (D) facing the competitive industry. The firms in this industry employ inputs of varying quality and productivity.
-______________________ get the producer surplus calculated in part f.
-______________________ get the producer surplus calculated in part f.
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Unlock Deck
k this deck
Unlock Deck
Unlock for access to all 58 flashcards in this deck.
