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Practice: Perfect Competition

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Wize University Microeconomics Textbook > Firms in Competitive Markets (Perfect Competition)

Shutdown Rule

5 Activities

Wize University Microeconomics Textbook > Firms in Competitive Markets (Perfect Competition)

Long Run

4 Activities

Wize University Microeconomics Textbook > Firms in Competitive Markets (Perfect Competition)

Profit Maximization

3 Activities

Competition in the Short Run vs. Long Run
More Shutdown Rule Questions:
If the perfectly competitive market price is P1 the firm above
A firm in a perfectly competitive equilibrium market makes an economic profit if
Does economic loss make a business shut down?
In the diagram below, the shutdown price and output are:
The perfectly competitive firm’s short run supply curve is the upward-sloping part of its
A perfectly competitive firm will produce output in the short run even if P<ATC because
A perfectly competitive firm is maximizing profit if
A firm in a perfectly competitive equilibrium market makes an economic profit if
The supply curve for a perfectly competitive industry is the horizontal sum of the individual firmsʹ
Firms in perfectly competitive markets produce the level of output for which
More Long Run Questions:
Suppose the price in the perfectly competitive market above is P3.
Suppose a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
Practice Questions: Perfect Competition 2
Competition in the Short Run vs. Long Run
Q; Does economic loss make a business shut down?
Q: If firms in perfect competition make zero profits in the long-run, does that mean they are non-profit?
If a firm is making a normal profit then
True/false:
In the diagram below, the long run price and output are:
If firms enter a competitive industry, the
Does economic loss make a business shut down?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
A firm will exit a perfectly competitive market in the long run when the total revenue is insufficient to cover the
Practice: Perfect Competition in Long run
If a firm is perfectly competitive and is in long-run equilibrium, which of the following statements is true?
A firm in a perfectly competitive equilibrium market makes a normal profit if
A firm will exit a perfectly competitive market in the long run when the price is low to the point where total revenue is insufficient to cover the
Which of the following market structures has excess capacity?
Suppose that the market for growing avocados is perfectly competitive. The price charged by producers is $2 per avocado and the marginal cost is $1.25.
The market for olive oil is perfectly competitive and is in equilibrium. On the news, Dr. Simpson says "Olive oil has been found to be associated with high risk for cardiovascular disease according to our studies.”
Which of the following will likely occur as result of the news?
More Profit Maximization Questions:
Practice Question: Perfect Competition
The graph below shows the cost curves for a producer in a perfectly competitive market.
a) If the market price is P3, what quantity level will the firm produce? Will the firm be making a profit or loss?
b) Should the producer keep producing or shut down?
A perfectly competitive market is one in which
Suppose Diane Corp. is a profit-maximizing firm that is producing and selling 1 billion reusable straws at a cost of $0.04 per unit. The market demand for this product is 1.5 billion.
The term ʺ perfect competitionʺ refers to
The market for olive oil is perfectly competitive and is in equilibrium. On the news, Dr. Simpson says "Olive oil has been found to be associated with high risk for cardiovascular disease according to our studies.”
Which of the following will likely occur as result of the news?
i) the quantity demanded for olive oil will decrease
Suppose that the market for growing avocados is perfectly competitive. The price charged by producers is $2 per avocado and the marginal cost is $1.25.
A perfectly competitive firm will produce output in the short run even if P<ATC because
Consider a perfectly competitive firm in the following position: the firm produces 4000 units, the market price is $1, fixed costs are equal to $5000, variable costs equal $900, and marginal cost equals $1.10. In order to maximize profit in the short-run the firm should
A perfectly competitive market is one in which
A firm in a perfectly competitive equilibrium market makes an economic profit if
Practice: Perfect Competition /Short run
The diagram below shows the cost and marginal revenue curves for a perfectly competitive company.
Practice: Short-run (2)
Diane's donut company is producing 1150 donuts at a price of $5. If the firm is producing 1150 donuts and the average total cost is $4, the donut company will be
Practice: Profit Equation
Total revenue (TR) for an individual firm in a perfectly competitive market equals.
Practice: Perfect Competition
A perfectly competitive market is characterized by
In a perfectly competitive market, which of the following is equal to price?
A firm in a perfectly competitive equilibrium market makes a normal profit if
Firms in perfectly competitive markets produce the level of output for which
Which of the following market structures has excess capacity?
Practice: Perfect Competition
The graph below shows the cost curves for a producer in a perfectly competitive market.
Suppose that the market for growing avocados is perfectly competitive. The price charged by producers is $2 per avocado and the marginal cost is $1.25.
Practice: Short-run (1)
If the perfectly competitive market price is P1 the firm above