This graph represents a

firm making economic profit in the short run

Perfect competition is a type of market structure in which

it's easy to enter and exit the industry

If the market price is $5 and a PC firm raises it's price to $6, what will happen?

demand for the firm's good will drop to 0

This graph represents a

firm making economic loss in the short run

This graph represents a

firm making normal in the long run

The market for hot dogs in Detroit is perfectly competitive. What is true of market demand?

The market demand curve is downward sloping

Which statement is true about perfection competition?

Many small firms with homogeneous goods and services

Perfectly competitive firms are price takers because

each firm is small and goods are perfect substitutes

In a perfectly competitive market the market price is $4, then

marginal revenue and average revenue is equal to $4

In a PC market, which statement is true about an industry's and firm's demand curve?

Slopes downward / Perfectly elastic

The price charged by a perfectly competitive firm is determined by

the market demand and market supply

Which statement is true about a perfectly competitive firm in the long run?

Marginal revenue equals average total cost

This graph represents a

firm that shuts down in the short run

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Unit 3.6 Perfect Competition Short Run

26 termsStudBud Administration352 plays

Perfect Competition Short Run

Flashcards26 cardsFPractice quizPHost liveL

Questions 26

Answers

1
This firm would make positive economic and accounting profits if price was set at
P2
P3
P4
P1
2
Perfectly competitive firms change their _______according to varying market conditions.
Good
Output
Advertising
Price
3
This graph represents a
firm making economic loss in the short run
firm that shuts down in the short run
firm making 0 profit in the long run
firm making economic profit in the short run
4
Perfect competition is a type of market structure in which
firm's sell unique goods and services
firm's need to advertise
Individual firm's demand curve is perfectly inelastic
it's easy to enter and exit the industry
5
In the short run, the firm's individual supply curve is the
demand curve and is below AVC
demand curve and is above ATC
marginal cost curve above ATC
marginal cost curve above AVC
6
What is the economic loss of the perfectly competitive firm in the short run?
$10
$30
$90
$144
7
If the market price is $5 and a PC firm raises it's price to $6, what will happen?
the firm will increase output
the firm will earn economic profit of 0
demand for the firm's good will drop to 0
the firm will make economic profit
8
This graph represents a
firm making economic profit in the short run
firm making economic loss in the short run
firm that shuts down in the short run
firm that's breaking even in the long run
9
This graph represents a
firm making economic loss in the short run
firm making normal in the long run
firm that shuts down in the short run
firm making profit in the short run
10
What is the economic loss in this perfectly competitive firm in the short run?
$50 and shut down
$45 and shut down
$10 and shut down
$55 and shut down
11
The market for hot dogs in Detroit is perfectly competitive. What is true of market demand?
The market demand curve is downward sloping
The market demand curve is perfectly inelastic.
The market demand curve is perfectly elastic.
The market demand curve is perfectly inelastic.
12
What is the economic profit of this perfectly competitive firm in the short run?
$100
$70
$40
$140
13
At what price would a firm shut down?
P4
Less then P1
P3
P2
14
Which statement is true about perfection competition?
Many large firms with homogeneous goods and services
Many small firms with homogeneous goods and services
Many small firms are price makers
Many small firms with unique goods and services
15
Perfectly competitive firms are price takers because
firms take the price that government determines is a "fair"
all small firms must take the price set by the largest firm
each firm is small and goods are perfect substitutes
high barriers to entry force firms to compete
16
What is the economic profit in this perfectly competitive firm in the long run?
$35
$30
$7
$0
17
In a perfectly competitive market the market price is $4, then
average revenue is less than $4
marginal revenue is greater than $4
marginal revenue and average revenue is equal to $4
marginal revenue is less than $4
18
In a PC market, which statement is true about an industry's and firm's demand curve?
Slopes downward / Perfectly elastic
Perfectly elastic / Slopes downward
Perfectly inelastic / Slopes downward
Perfectly inelastic / Perfectly elastic
19
The price charged by a perfectly competitive firm is determined by
the individual firm
the total cost of the firm
the market demand and market supply
the firm's average variable cost
20
At which price and quantity will this firm make normal profit?
P3 and Q5
P3 and Q3
P4 and Q4
P2 and Q2
21
If MR is greater than MC, firms should
continue to produce the same output
shut down
decrease output
increase output
22
If MR is less than MC, firms should...
continue to produce the same output
decrease output
increase output
shut down
23
Which is true about perfect competition?
Firms are price takers
Firms need to advertise
Firms are price makers
Sellers have control over price
24
Which statement is true about a perfectly competitive firm in the long run?
Market price will eventually increase
AVC decreases
Market price will eventually decrease
Marginal revenue equals average total cost
25
What is the maximizing profit output for this perfectly competitive firm if MR is $20?
2
6
5
1
26
This graph represents a
firm that shuts down in the short run
firm making normal profit in the long run
firm making economic profit in the short run
firm making economic loss in the short run

Unit 3.6 Perfect Competition Short Run Flashcards | StudBud

Unit 3.6 Perfect Competition Short Run

26 termsStudBud Administration352 plays

Perfect Competition Short Run

Flashcards26 cardsFPractice quizPHost liveL

Questions 26

Answers

1
This firm would make positive economic and accounting profits if price was set at
P2
P3
P4
P1
2
Perfectly competitive firms change their _______according to varying market conditions.
Good
Output
Advertising
Price
3
This graph represents a
firm making economic loss in the short run
firm that shuts down in the short run
firm making 0 profit in the long run
firm making economic profit in the short run
4
Perfect competition is a type of market structure in which
firm's sell unique goods and services
firm's need to advertise
Individual firm's demand curve is perfectly inelastic
it's easy to enter and exit the industry
5
In the short run, the firm's individual supply curve is the
demand curve and is below AVC
demand curve and is above ATC
marginal cost curve above ATC
marginal cost curve above AVC
6
What is the economic loss of the perfectly competitive firm in the short run?
$10
$30
$90
$144
7
If the market price is $5 and a PC firm raises it's price to $6, what will happen?
the firm will increase output
the firm will earn economic profit of 0
demand for the firm's good will drop to 0
the firm will make economic profit
8
This graph represents a
firm making economic profit in the short run
firm making economic loss in the short run
firm that shuts down in the short run
firm that's breaking even in the long run
9
This graph represents a
firm making economic loss in the short run
firm making normal in the long run
firm that shuts down in the short run
firm making profit in the short run
10
What is the economic loss in this perfectly competitive firm in the short run?
$50 and shut down
$45 and shut down
$10 and shut down
$55 and shut down
11
The market for hot dogs in Detroit is perfectly competitive. What is true of market demand?
The market demand curve is downward sloping
The market demand curve is perfectly inelastic.
The market demand curve is perfectly elastic.
The market demand curve is perfectly inelastic.
12
What is the economic profit of this perfectly competitive firm in the short run?
$100
$70
$40
$140
13
At what price would a firm shut down?
P4
Less then P1
P3
P2
14
Which statement is true about perfection competition?
Many large firms with homogeneous goods and services
Many small firms with homogeneous goods and services
Many small firms are price makers
Many small firms with unique goods and services
15
Perfectly competitive firms are price takers because
firms take the price that government determines is a "fair"
all small firms must take the price set by the largest firm
each firm is small and goods are perfect substitutes
high barriers to entry force firms to compete
16
What is the economic profit in this perfectly competitive firm in the long run?
$35
$30
$7
$0
17
In a perfectly competitive market the market price is $4, then
average revenue is less than $4
marginal revenue is greater than $4
marginal revenue and average revenue is equal to $4
marginal revenue is less than $4
18
In a PC market, which statement is true about an industry's and firm's demand curve?
Slopes downward / Perfectly elastic
Perfectly elastic / Slopes downward
Perfectly inelastic / Slopes downward
Perfectly inelastic / Perfectly elastic
19
The price charged by a perfectly competitive firm is determined by
the individual firm
the total cost of the firm
the market demand and market supply
the firm's average variable cost
20
At which price and quantity will this firm make normal profit?
P3 and Q5
P3 and Q3
P4 and Q4
P2 and Q2
21
If MR is greater than MC, firms should
continue to produce the same output
shut down
decrease output
increase output
22
If MR is less than MC, firms should...
continue to produce the same output
decrease output
increase output
shut down
23
Which is true about perfect competition?
Firms are price takers
Firms need to advertise
Firms are price makers
Sellers have control over price
24
Which statement is true about a perfectly competitive firm in the long run?
Market price will eventually increase
AVC decreases
Market price will eventually decrease
Marginal revenue equals average total cost
25
What is the maximizing profit output for this perfectly competitive firm if MR is $20?
2
6
5
1
26
This graph represents a
firm that shuts down in the short run
firm making normal profit in the long run
firm making economic profit in the short run
firm making economic loss in the short run