Firms in Competitive Markets

Which of the following is a primary characteristic of a competitive market?

For a firm in a competitive market, marginal revenue is equal to what?

If a competitive firm is selling 1,000 gallons of milk at a market price of dollar 6 per gallon, and it decides to sell 1,001 gallons, what will its marginal revenue be for the 1,001st gallon?

A competitive firm's profit-maximizing level of output is determined by the intersection of which two curves?

A firm will make the short-run decision to shut down if the price of its product is less than what?

In the context of a firm's production decisions, a cost that has already been committed and cannot be recovered is known as a:

According to the Case Study 'Near-Empty Restaurants and Off-Season Miniature Golf,' why might a restaurant choose to stay open for lunch even if it cannot cover all its costs?

The competitive firm’s long-run supply curve is the portion of its marginal-cost curve that lies above what?

In a competitive market with 1,000 identical firms, how is the short-run market supply curve derived?

In the long-run equilibrium of a competitive market with free entry and exit, firms must be operating at what point?

What does it mean when a competitive firm is making 'zero economic profit'?

If demand for a product increases in a competitive market, what happens to the price and quantity in the short run?

Following a short-run increase in demand that leads to positive economic profits, what happens in the long run in a competitive market?

Under what condition would the long-run market supply curve for a good be perfectly elastic (horizontal)?

What is the relationship between price (P) and marginal cost (MC) for a competitive firm in the long-run equilibrium?

Using the numerical example in Table 2 on page 283, what is the profit-maximizing quantity of milk for the Vaca Family Dairy Farm to produce?

If a competitive firm faces a price of dollar 10, and at a quantity of 100 units its average total cost is dollar 8, what is the firm's profit?

If a firm in a competitive market is producing at a quantity where marginal cost is dollar 15 and its marginal revenue is dollar 20, what should the firm do to maximize profit?

The 'efficient scale' of a firm is the quantity of output that does what?

Why might a firm's long-run supply curve be more elastic than its short-run supply curve?

If a competitive firm is earning positive economic profits in the short run, what would you expect to happen to the market price in the long run?

What is the primary difference between a firm's short-run decision to shut down and its long-run decision to exit?

If a competitive firm's price equals its average total cost, what is its economic profit?

In Figure 5(b) on page 290, which shows a firm with losses, the area of the shaded rectangle represents what?

What is the primary conclusion about the price you pay for a good in a competitive market?

If the market price for a competitive firm's output is dollar 50, and the firm's average total cost is dollar 50, the firm's economic profit is:

The Vaca Family Dairy Farm sells milk in a competitive market. The price of milk is dollar 6 per gallon. The farm's total cost is dollar 23 when it produces 5 gallons. What is the farm's profit?

Which of these costs are ignored when a firm is making the short-run decision to shut down?

If a competitive firm producing 100 units of output has a marginal revenue of dollar 10, what will be its marginal revenue if it increases output to 101 units?

The supply curve for a competitive firm is its:

If a farmer has an opportunity cost of dollar 80,000 to run his farm (forgone wages and interest), what is his economic profit when his accounting profit is also dollar 80,000?

The long-run equilibrium in a competitive market is characterized by firms:

What is the consequence of a short-run increase in demand for a product in a competitive market?

If a competitive firm faces a price of dollar 20, and its profit-maximizing output is 500 units where its ATC is dollar 15 and its AVC is dollar 10, what is the firm's short-run profit?

A competitive firm is considered a price taker because:

If a firm's total revenue is dollar 12,000 when it sells 2,000 gallons of milk, what is its average revenue?

The competitive firm's decision to enter a market is the opposite of its decision to exit. A firm will enter if:

Using the data in Table 2 on page 283, what is the marginal cost of producing the third gallon of milk?

If a firm is making a loss in the short run (P < ATC) but the price is still above its average variable cost (P > AVC), the firm should:

A key conclusion of Chapter 14 is that in a long-run equilibrium with free entry and exit, price equals:

What is the primary motivation for new firms to enter a competitive market?

Which of the following would NOT be considered a characteristic of a perfectly competitive market?

If a firm is in a competitive market, its total revenue is proportional to what?

When a firm's average total cost is at its minimum, what is true of the relationship between marginal cost (MC) and average total cost (ATC)?

If the long-run market supply curve is upward sloping, what does this imply about the firms in the market?

A competitive firm is currently producing a quantity where its average total cost is dollar 25, its average variable cost is dollar 15, and the market price is dollar 20. What should this firm do in the short run?

If an increase in demand occurs in a competitive market that was in long-run equilibrium, after all short-run and long-run adjustments are made, what is the final state of economic profit for the firms?

When a firm's total revenue is less than its total cost, its profit is:

In the example of the Vaca Family Dairy Farm in Table 2, what are the fixed costs?

In a competitive market, a firm's decision to enter in the long run depends on whether the price exceeds what?