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Exam 10: Pure Competition in the Short Run

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Question 91

Multiple Choice

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Refer to the data in the accompanying table. If the firm's minimum average variable cost is $11, at the profit-maximizing level of output, the firm's total revenue is

A) $48.
B) $80.
C) $32.
D) $64.

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Question 92

Multiple Choice

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The MR = MC rule applies

A) to firms in all types of industries.
B) only when the firm is a "price taker."
C) only to monopolies.
D) only to purely competitive firms.

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Question 93

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A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 200 units is $4.00. The average variable cost is $3.50. The market price of the product is $3.00. To maximize profits or minimize losses, the firm should

Which of the following is not a characteristic of pure competition?

What are the differences between average, total, and marginal revenue?

Price is constant to the individual firm selling in a purely competitive market because

The accompanying graph shows short-run cost curves for a competitive firm. At what price would the firm break even?

Refer to the diagram, which pertains to a purely competitive firm. Curve C represents

If the demand curve faced by an individual firm is downward-sloping, the firm cannot be

Given the accompanying table, what is the short-run profit-maximizing level of output for the firm?

At P ₁ in the accompanying diagram, this firm will produce

What are four characteristics of pure competition?

Refer to the accompanying graph for a purely competitive firm operating at a loss in the short run. Which area in the graph represents the amount of economic loss for the firm?

Which market model assumes the least number of firms in an industry?

A purely competitive firm is currently in short-run equilibrium and its MC exceeds its ATC at its current output level. It can be concluded that

Firms in a monopolistically competitive industry have no reason to engage in nonprice competition because their products are uniquely different from other sellers in the market.

The basic difference between pure competition and monopolistic competition is in the number of firms in the industry.

The term imperfect competition refers to every market structure besides pure competition.

Although individual purely competitive firms can influence the price of their product, these firms as a group cannot influence market price.

In the short run, a purely competitive seller will shut down if product price