QUESTION 22 What happens if a single firm in a perfectly competitive market raises its price above that charged by other firms O a. It loses market share O b. Nothing happens because it has loyal customers O c. It goes out of business O d. It makes supernormal profit until other firms follow
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- Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?If Doug's Dry Cleaners operates in a perfectly competitive market, and its shutdown price is $12/shirt, what does this firms short run supply curve look like? Select one: a. starting from price at which Doug starts making some economic profit, the short run supply curve is his MC curve. O b. it is an upward sloping curve starting at origin C Doug supplies nothing up to $12/shirt; after that it is his MC curve d. Doug supplies nothing up to $12/shirt; after that it is his AVC curve e. None of the answers offered are accurate.QUESTION 41 Figure 14-13 Suppose a firm in a competitive industry has the following cost curves: 10 9 8 7 3.5 6 ↑Price 3+ 1 2 3 4 5 MC 6 7 8 ATC AVC Quantity Refer to Figure 14-13. If the price is $6 in the short run, what will happen in the long run? O a. Because the price is below the firm's average variable costs, the firms will shut down. O b. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. O c. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. O d. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry.
- When a firm makes profit, this sends a signal to others. More competitors would enter the business, increasing supply and driving prices O positive economic profit; up O positive economic profit; down O pormal profit; down O positive accounting profit; down.Back Perfect. Comp Assignment.pdf 1. Draw a graph representing a perfectly competitive firm earning an economic profit. (Make sure to show both the firm and the industry graphs) What happens over-time, if many firms are earning economic profits? Is this good or bad for consumers? Explain. 2. Now draw a firm operating under perfect competition that is losing money but should still stay open in the short run. (Again, show both the firm and the industry graphs) lendar To Do A Notifications M InboxThe figure given below shows the revenue and cost curves of a perfectly competitive firm Figure 10.2 Price 60 35 30 20 10 0 MC: Marginal cost curve MR: Marginal revenue curve AFC: Average-total-cost curve AVC: Average-variable-cost curve O $10. O $35. O $30. 10 O $20. O $50. 15 According to Figure 10.2, the break-even price of the firm is: MC 20 -MR AVC ATC Quantity
- What are the three conditions for a market to be perfectly competitive? For a market to be perfectly competitive, there must be O A. many buyers and a small number of firms that compete, selling identical products, and barriers to new firms entering the market. O B. many buyers and one seller, with the firm producing a product that has no close substitutes, and barriers to new firms entering the market. OC. many buyers and a few sellers, with all firms selling identical products, and no barriers to new firms entering the market. O D. many buyers and sellers, with all firms selling identical products, and no barriers to new firms entering the market. O E. many buyers and sellers, with firms selling similar but not identical products, with low barriers new firms entering the market.When a firm makes profit, this sends a signal to others. More competitors would enter the business, increasing supply and driving prices O positive economic profit; down positive accounting profit; down normal profit; down O positíve economic profit; up40 30 20 10 10 15 20 25 30 Quantity The figure above portrays a total revenue curve for a perfectly competitive firm. The firm's marginal revenue from selling a unit of output Select one: O a. equals $0.50. O b. equals $1.00. O c. equals $2.00. O d. cannot be determined.
- 1) Briefly explain how the total revenue for a profit-seeking film is determined 2)Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs? 3)Contrast the rold of fixed costs and variable costs in economic decisions about future prodiction 4)Briefly compare and contrast the perceived demand curve for a monopolitically competitive firm and a perfectly competitive firm. 5)Briefly explain what quantity a profit maximizing monopolistic competitor will seek. Why not this type of competitive frim is productively efficient?QUESTION 5 Which of the following is true for monopoly and perfect competition? CA The demand for the individual firm's product is perfectly elastic. O B.Economic profits can OC.Marginal revenue is be sustained O D. Profits are maximized by producing at the level of output where marginal revenue is equal to marginal cost horizontal at the indefinitely over time. industry equilibrium price.If a perfectly competitive firm's marginal revenue is greater than its marginal cost, as it increases its output, its profit product and the price it can charge for its O A. decreases; falls O B. decreases; rises O C. increases; does not change D. decreases; does not change O E. increases; falls