Which one is not a condition of perfectly competitive market?
Large number of firms
Price maker
Size is too small to affect the market
Must take the market price as given
No market power
NO barriers to exit or enter into the market
How to find profit maximization quantity of output (in short run)?
the intersection of MR and MC
the intersection of AVC and ATC
the intersection of MC and ATC
the intersection of AVC and MR
Which of the following is true towards Perfect Competition?
TR=Profit
Profit = P*Q
D=P=AR=MR
there is only variable cost, no fixed cost
Which one is ATC?
Red curve
Yellow curve
Green curve
gray curve
Which one is the breakeven point?
A
C
B
None of the points
Which point is the shutdown point?
A
C
B
None
Under Perfectly competitive market condition, what can be determined by the individual firm?
How much price to charge?
Market supply
how many units of output to produce?
Market Demand
Which of the following best illustrates a perfectly competitive market?
jeans
electric power
breakfast cereal with brand
soybeans
In the perfectly competitive market, all firms in the market are assumed to be producing:
identical products.
products that are heavily advertised.
differentiated products.
complementary products.
A firm that is a price taker can:
substantially change the market price of its product by changing its level of production.
sell some of its output at a price higher than the market price.
sell its output at the market price.
decide what price to charge for its product.
The demand for the product of a competitive price-taker firm is:
perfectly inelastic.
greater than zero but less than one.
perfectly elastic.
dependent on the availability of substitutes for the firm's product.
In the short run, if a perfectly competitive firm is producing at a price below average total cost, its economic profit is
Positive
Zero
Negative
It depends
A competitive firm maximizes its profits (or minimizes is losses) by producing the quantity where the market price equals the firm's:
marginal cost.
average variable cost.
average fixed cost.
average total cost.
A firm with ATC = $15, AVC = $12, and MC = $14,maximizes its profits or minimizes its losses, then the price of the product is:
Marginal revenue is the change in:
total profit brought about by selling one more unit of output.
total revenue brought about by selling one more unit of output.
output brought about by a $1 change in product price.
price brought about by selling one more unit of output.
If a perfectly competitive firm sells 50 units of output at a market price of $10 per unit, its marginal revenue is: （直接写数字，不用加单位）
If a firm in a competitive industry is making zero economic profit but still producing, it must be the case that:
a. MC = MR > ATC.
c. MC = ATC > MR.
d. MC = MR = ATC.
b. MC = MR < ATC.
Ann sold 10,000 fish with market price $7 per fish. If the average variable cost is $4/per fish and the fixed cost of fishing is $20,000, her profit is $__?
A sandwich shop owner has the following information: P = MR = $4, ATC = $2, AVC = $1, MC = 4, and Q = 500. From this, she can determine:
a. her profits are not being maximized.
d. she has earned economic profits of $1,500.
c. she has earned economic profits of $1,000.
b. she has earned zero economic profits.
If a firm increases output when MR > MC, then:
a. profit will equal zero.
b. profit will increase.
c. profit will decrease.
d. profit will remain the same.
A firm is currently operating where the MC of the last unit produced = $64, and the MR of this unit = $70. What would you advise this firm to do?
a. Shut down.
c. Stay at current output.
b. Increase output.
d. Decrease output.
A firm is currently operating where the MC of the last unit produced = $84, and the MR of this unit = $70. What would you advise this firm to do?
a. Shut down.
c. Stay at its current output.
d. Decrease output.
b. Increase output.
A competitive firm maximizes its profits (or minimizes is losses) by producing the quantity where the market price equals the firm's:
a. marginal cost.
c. average variable cost.
b. average total cost.
d. average fixed cost.
In the short run, if a perfectly competitive firm is producing at a price below average total cost, its economic profit is:
negative
zero
positive
hard to say
A perfectly competitive firm sells its output for $100 per unit and marginal cost is $100 per unit. To maximize short-run profit, the firm should:
a. increase output.
b. decrease output.
c. maintain its current output.
d. shut down.
Under perfect competition, which of the following are equal at all levels of output?
a. price and marginal cost
d. marginal cost and short-run average total cost
b. price and marginal revenue
c. marginal cost and marginal revenue
Under perfect competition, a firm is a price taker because:
a. setting a price higher than the going price results in profits.
c. each firm has a significant market share.
d. setting a price higher than the going price results in zero sales.
b. each firm's product is perceived as different.
When a product is defined as homogeneous,
a. buyers prefer one seller's product to another's.
c. sellers are indifferent as to the quantity of the product they sell.
b. buyers are indifferent as to which seller's product they buy.
d. sellers have an incentive to charge a price higher than the market price.
if a perfectly competitive market is in long-run equilibrium, what will happen if there is a decrease in market demand?
A. The market price will increase
B. Firms will earn positive economic profits
E. Firms will enter the industry
C. Firms will exit the industry
D. The market price will remain unchanged
when minAVC< P < minATC, under a perfect competitive market, what will a firm do to minimize its loss?
keep running in the SR, to cover its variable costs and part of fixed costs
sell all fixed resources to cover the costs
shutdown in SR and exit the market in LR
breakeven to make zero economic profit
Long run, perfect competition firms are earning ___ economic profit.
zero
negative
positive
it depends