Question 1

Table 14-13
Diana's Dress Emporium
 
-Refer to Table 14-13.In order to maximize profits,how many units should Diana's Dress Emporium produce?

Accepted Answer

A)   5
B)   6
C)   7
D)   8E) B) and C)
F) None of the above

Question 2

A firm lacks market power if it cannot influence __________.

Accepted Answer

the price ...

Question 3

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)   Firms are price takers.
B)   Firms can freely enter the market.
C)   Many firms have market power.
D)   Goods offered for sale are largely the same.E) A) and B)
F) All of the above

Question 4

Suppose that a firm operating in perfectly competitive market sells 400 units of output at a price of $4 each.Which of the following statements is correct? (i) 
Marginal revenue equals $4.
(ii) 
Average revenue equals $100.
(iii) 
Total revenue equals $1,600.

Accepted Answer

A)   (i) only
B)   (iii) only
C)   (i) and (iii) only
D)   (i) , (ii) ,and (iii) E) A) and B)
F) A) and C)

Question 5

For a firm operating in a competitive market,both marginal revenue and average revenue exceed the market price.

Accepted Answer

A) True 
 B)False

Question 6

News reports from the western United States occasionally report incidents of cattle ranchers slaughtering a large number of newborn calves and burying them in mass graves rather than transporting them to markets.Assuming that this is rational behavior by profit-maximizing "firms," explain what economic factors may influence such behavior.

Accepted Answer

If the selling price is not su...

Question 7

Table 14-14
The following table presents cost and revenue information for Bob's bakery production and sales.
 
-Refer to Table 14-14.At what quantity will Bob maximize his profit?

Accepted Answer

A)   5 units
B)   6 units
C)   7 units
D)   8 unitsE) C) and D)
F) All of the above

Question 8

Which of the following statements is not correct?

Accepted Answer

A)   In a long-run equilibrium,marginal firms make zero economic profit.
B)   To maximize profit,firms should produce at a level of output where price equals average variable cost.
C)   The amount of gold in the world is limited.Therefore,the gold jewelry market probably has a long-run supply curve that is upward sloping.
D)   Long-run supply curves are typically more elastic than short-run supply curves.E) All of the above
F) A) and B)

Question 9

When price is greater than marginal cost for a firm in a competitive market,

Accepted Answer

A)   marginal cost must be falling.
B)   the firm must be minimizing its losses.
C)   there are opportunities to increase profit by increasing production.
D)   the firm should decrease output to maximize profit.E) C) and D)
F) None of the above

Question 10

Profit maximizing firms in competitive industries with free entry and exit face a price equal to the lowest possible

Accepted Answer

A)   marginal cost of production.
B)   fixed cost of production.
C)   total cost of production.
D)   average total cost of production.E) None of the above
F) A) and C)

Question 11

A firm in a competitive market has the following cost structure:  If the market price is $16,this firm will

Accepted Answer

A)   produce 4 units of output in the short run and exit in the long run.
B)   produce 5 units of output in the short run and exit in the long run.
C)   produce 5 units of output in the short run and face competition from new market entrants in the long run.
D)   shut down in the short run and exit in the long run.E) None of the above
F) A) and B)

Question 12

Table 14-12
Bill's Birdhouses
 
-Refer to Table 14-12.What is Bill's economic profit at the profit-maximizing output level?

Accepted Answer

A)   $25
B)   $75
C)   $115
D)   $225E) A) and D)
F) A) and B)

Question 13

Table 14-6
The following table presents cost and revenue information for a firm operating in a competitive industry.
 
-Refer to Table 14-6.What is the marginal revenue from selling the 3rd unit?

Accepted Answer

A)   $55
B)   $120
C)   $137
D)   $140E) A) and C)
F) All of the above

Question 14

A firm operating in a perfectly competitive industry will continue to operate if it earns zero economic profits because it is likely to be earning positive accounting profits.

Accepted Answer

A) True 
 B)False

Question 15

Figure 14-1 
-Refer to Figure 14-1.At what price is the firm's maximum profit zero?

Accepted Answer

A)   $80
B)   $90
C)   $100
D)   $125E) A) and C)
F) All of the above

Question 16

In a competitive market,the actions of any single buyer or seller will

Accepted Answer

A)   have a negligible impact on the market price.
B)   have little effect on market equilibrium quantity but will affect market equilibrium price.
C)   affect marginal revenue and average revenue but not price.
D)   adversely affect the profitability of more than one firm in the market.E) B) and C)
F) A) and D)

Question 17

When a profit-maximizing firm in a competitive market has zero economic profit,accounting profit

Accepted Answer

A)   is negative.
B)   is at least zero.
C)   is also zero.
D)   could be positive,negative or zero.E) None of the above
F) All of the above

Question 18

A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average variable cost.

Accepted Answer

A) True 
 B)False

Question 19

For a certain firm,the 100th unit of output that the firm produces has a marginal revenue of $10 and a marginal cost of $7.It follows that the

Accepted Answer

A)   production of the 100th unit of output increases the firm's profit by $3.
B)   production of the 100th unit of output increases the firm's average total cost by $7.
C)   firm's profit-maximizing level of output is less than 100 units.
D)   production of the 99th unit of output must increase the firm's profit by less than $3.E) None of the above
F) A) and B)

Question 20

Table 14-12
Bill's Birdhouses
 
-Refer to Table 14-12.What is the total revenue from selling 4 units?

Accepted Answer

A)   $80
B)   $137
C)   $320
D)   $480E) None of the above
F) B) and C)

Exam 14: Firms in Competitive Markets

Table 14-12 Bill's Birdhouses -Refer to Table 14-12.What is Bill's economic profit at the profit-maximizing output level?

Correct Answer
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Figure 14-1 -Refer to Figure 14-1.At what price is the firm's maximum profit zero?

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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For a firm operating in a competitive market,both marginal revenue and average revenue exceed the market price.

Correct Answer
verified

For a certain firm,the 100th unit of output that the firm produces has a marginal revenue of $10 and a marginal cost of $7.It follows that the

Correct Answer
verified

Which of the following is not a characteristic of a perfectly competitive market?

Correct Answer
verified

A firm in a competitive market has the following cost structure: If the market price is $16,this firm will

Correct Answer
verified

When a profit-maximizing firm in a competitive market has zero economic profit,accounting profit

Correct Answer
verified

A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average variable cost.

Correct Answer
verified

Table 14-6 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-6.What is the marginal revenue from selling the 3rd unit?

Correct Answer
verified

A firm operating in a perfectly competitive industry will continue to operate if it earns zero economic profits because it is likely to be earning positive accounting profits.

Correct Answer
verified

In a competitive market,the actions of any single buyer or seller will

Correct Answer
verified

When price is greater than marginal cost for a firm in a competitive market,

Correct Answer
verified

Correct Answer
verified
If the selling price is not su...
View Answer

Table 14-14 The following table presents cost and revenue information for Bob's bakery production and sales. -Refer to Table 14-14.At what quantity will Bob maximize his profit?

Correct Answer
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A firm lacks market power if it cannot influence __________.

Correct Answer
verified
the price ...
View Answer

Suppose that a firm operating in perfectly competitive market sells 400 units of output at a price of $4 each.Which of the following statements is correct? (i) Marginal revenue equals $4. (ii) Average revenue equals $100. (iii) Total revenue equals $1,600.

Correct Answer
verified

Profit maximizing firms in competitive industries with free entry and exit face a price equal to the lowest possible

Correct Answer
verified

Table 14-13 Diana's Dress Emporium -Refer to Table 14-13.In order to maximize profits,how many units should Diana's Dress Emporium produce?

Correct Answer
verified

Table 14-12 Bill's Birdhouses -Refer to Table 14-12.What is the total revenue from selling 4 units?

Correct Answer
verified

Exam 14: Firms in Competitive Markets

Table 14-12 Bill's Birdhouses -Refer to Table 14-12.What is Bill's economic profit at the profit-maximizing output level?

Correct AnswerverifiedShow Answer

Figure 14-1 -Refer to Figure 14-1.At what price is the firm's maximum profit zero?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

For a firm operating in a competitive market,both marginal revenue and average revenue exceed the market price.

Correct AnswerverifiedShow Answer

For a certain firm,the 100th unit of output that the firm produces has a marginal revenue of $10 and a marginal cost of $7.It follows that the

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of a perfectly competitive market?

Correct AnswerverifiedShow Answer

A firm in a competitive market has the following cost structure: If the market price is $16,this firm will

Correct AnswerverifiedShow Answer

When a profit-maximizing firm in a competitive market has zero economic profit,accounting profit

Correct AnswerverifiedShow Answer

A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average variable cost.

Correct AnswerverifiedShow Answer

Table 14-6 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-6.What is the marginal revenue from selling the 3rd unit?

Correct AnswerverifiedShow Answer

A firm operating in a perfectly competitive industry will continue to operate if it earns zero economic profits because it is likely to be earning positive accounting profits.

Correct AnswerverifiedShow Answer

In a competitive market,the actions of any single buyer or seller will

Correct AnswerverifiedShow Answer

When price is greater than marginal cost for a firm in a competitive market,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIf the selling price is not su...View AnswerShow Answer

Table 14-14 The following table presents cost and revenue information for Bob's bakery production and sales. -Refer to Table 14-14.At what quantity will Bob maximize his profit?

Correct AnswerverifiedShow Answer

A firm lacks market power if it cannot influence __________.

Correct Answerverifiedthe price ...View AnswerShow Answer

Suppose that a firm operating in perfectly competitive market sells 400 units of output at a price of $4 each.Which of the following statements is correct? (i) Marginal revenue equals $4. (ii) Average revenue equals $100. (iii) Total revenue equals $1,600.

Correct AnswerverifiedShow Answer

Profit maximizing firms in competitive industries with free entry and exit face a price equal to the lowest possible

Correct AnswerverifiedShow Answer

Table 14-13 Diana's Dress Emporium -Refer to Table 14-13.In order to maximize profits,how many units should Diana's Dress Emporium produce?

Correct AnswerverifiedShow Answer

Table 14-12 Bill's Birdhouses -Refer to Table 14-12.What is the total revenue from selling 4 units?

Correct AnswerverifiedShow Answer

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If the selling price is not su...
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the price ...
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