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Which of the following is not true of a perfectly competitive market?
Firms face significant barriers to entry.
Perfectly competitive firms are price takers because
each firm is small and goods are perfect substitutes for one another
Adam's Apples, a small firm supplying apples in a perfectly competitive market, decides to cut its production in half this year. As a result, the
market price will not be affected
Because market price remains constant as a perfectly competitive firm expands output, each firm faces

5. a horizontal demand curve
The total revenue curve for a perfectly competitive firm
is a straight line starting from the origin and sloping upward
For perfectly competitive firms, what is the relationship among market price (P), average revenue (AR), and marginal revenue (MR)?
P = AR = MR
If Harry's Blueberries, a perfectly competitive firm, shuts down in the short run, Harry must pay
only fixed cost
If a perfectly competitive firm is incurring a short-run loss, it
will continue to operate in the short run if its variable cost is covered
Claude's Copper Clappers sells clappers for $60 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $65, average variable cost is $25, and average total cost is $62. To improve his profit/loss situation, Claude should
reduce output but not to zero

The short-run supply curve of a perfectly competitive firm is
the part of its marginal cost curve rising above the average variable cost curve

A decline in demand in a competitive industry could result in
all of the above
Long-run equilibrium for a perfectly competitive firm occurs when
P = MC = MR = ATC
A constant-cost industry is one
whose cost curves do not change as new firms enter
Assume that a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly increases. Which of the following statements is not correct?
1.Existing firms will increase output in the short run
2.New firms will enter the industry in the long run
3. Some resource suppliers to the industry will earn higher income
4.The new long-run equilibrium price will exceed the original equilibrium price
5. Existing firms will earn economic profits in the new long-run equilibrium

Existing firms will earn economic profits in the new long-run equilibrium

If a market is productively efficient,
the output is being produced at the lowest possible resource cost
In the short run, producer surplus equals
TR - VC
If every firm is a price taker, then which of the following characteristics does their industry have?
large number of sellers
Suppose the equilibrium price in a perfectly competitive industry is $100 and a firm in the industry charges $112. Which of the following will happen?
The firm will not sell any of its output.
Suppose the market for hot pretzels in New York City is perfectly competitive. What is true of demand in this market?
The demand curve facing each seller is perfectly elastic
In Connecticut, the apple market is perfectly competitive. Suppose that consumer tastes change so that the market demand for apples increases. In that case, the demand curves faced by individual firms will
shift upward
The slope of the total revenue curve for a perfectly competitive firm equals
marginal revenue, which is equal to price
Farmer Fanny sells her crops in a perfectly competitive market. If she produces 500 bushels for total revenue of $3,000 and if harvesting the 501st bushel would raise her total cost from $2,500 to $2,510, her
profit will fall by $4 if she harvests the 501st bushel
In the short run, if a firm shuts down, its loss is equal to
its fixed costs
Many country inns shut down in the off-season because
the off-season revenue can't cover variable cost
At its present rate of output, 200 units, a perfectly competitive firm has total cost of $10,000, marginal cost of $38, and fixed cost of $2,000, and it charges the market price of $38 per unit. To maximize profit or minimize loss, this firm should
shut down
Suppose that an increase in population increases demand in New Haven County's perfectly competitive market for auto repair. Which of the following is true in the short run?
Auto repair centers may be able to earn economic profit.
Tim Tupper's term paper-typing business is a perfectly competitive firm in long-run equilibrium. Which of the following doesnot describes the firm's situation?
Entrepreneurs outside the industry will be eager to enter.
Assume that a perfectly competitive constant-cost industry is in long-run equilibrium when market demand suddenly decreases. Which of the following statements is incorrect?
The market supply curve will shift to the right in the long run
The long-run market supply curve for an increasing-cost, perfectly competitive industry
slopes upward
Allocative efficiency occurs in markets when
marginal benefit and marginal cost for the last unit sold are equal
If MC's Hammers, a perfectly competitive firm, finds that its total revenue is $45,000, its fixed cost is $20,000, and its total cost is $50,000, its producer surplus is
$15,000 Shifts of the demand curve are caused by the change of income, the price of a substitute or complement, consumer expectation, the size of the number of consumers, or consumer tastes.
ShSuppose the equilibrium price in a perfectly competitive industry is $100 and a firm in the industry charges $112. Which of the following will happen? Suppose the equilibrium price in a perfectly competitive industry is $100 and a firm in the industry charges $112. Which of the following will happen? the equilibrium price in a perfectly competitive industry is $100 and a firm in the industry charges $112. Which of the following will happen? taker:
Price taker:
Shifts of the demand curve are caused by the change of income, the price of a substitute or complement, consumer expectation, the size of the number of consumers, or consumer tastes. Shifts of the demand curve are caused by the change of income, the price of a substitute or complement, consumer expectation, the size of the number of consumers, or consumer tastes. a firm that faces a given market price and whose quantity supplied has no effect on that price; suppliers are price takers in a perfectly competitive market, which has many buyers and sellers.
a firm that faces a given market price and whose quantity supplied has no effect on that price; suppliers are price takers in a perfectly competitive market, which has many buyers and sellers.
Shifts in the demand curver are caused from:
Shifts of the demand curve are caused by the change of income, the price of a substitute orcomplement, consumer expectation, the size of the number of consumers, or consumer tastes.
Total Revinue = ?
Price (or MR) x Quantaties
Variable Cost =?
VC=TC(total cost) -FC (fixed cost)
Average Variable Cost =?
AVC = VC (variable cost)/ Quantity
Economic profit attracts....
new firms to enter the industry,  but in the longrun equilibrium firms earn a normal profit.
Allocative Efficiency
the condition that exists when firms produce the output most preferred byconsumers; marginal benefit equals marginal cost
Surplus =
TR (total revenue) - VC (variable cost)
Which of the following prevents potential competitors from entering a monopolist's market?
Ans.: legal restrictions
Barriers to entry to a monopolist’s market:
Legal restrictions, economies of scale and control ofessential resources
Natural monopolies form when
long-run average cost declines as a firm expands output
The demand curve faced by a firm with a patent on a marketable product
A monopolist as a price maker can set the price on the demand curve but his marginal revenue curve isalways under the demand curve
Because monopolists are price makers, they don’t need to change their quantity of output according tothe change of price.
If average total cost is higher than price, a monopolist gets profit loss.
Allocative efficiency: the condition that exists when firms produce the output most preferred byconsumers; marginal benefit equals marginal cost, which is satisfied at a market equilibrium output andprice that is shown on a point at which the demand and supply curve intersect
A monopolist is
a single seller of a product with no close substitutes
Patent laws...
increase incentive to innovate by restricting entry into a market
The demand curve a monopolist uses in making an output decision is
the same as the market demand curve
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