21 - Which of the following is NOT one of features characterizing market structures? a) the number and size of firms b) the level of capital investment in research and development c) O the likelihood of new firm's entering a market d) O the degree of product differentiation

11. Refer to the table below Output Total Variable Cost Total Cost 012345678 $0 $100 $100. $200 $140 $240 $190 $290 $250 $350 $320 $420 $400 $500 $490 $590 $590 $690 Suppose the firm has maximized profit based on the market price at the output of 8 units. What is the marginal revenue earned from the eighth unit? A) $100 B) $90 C) $590 D) $110 E) $690

$150 $145 $140 MC $135 $130 $125 $120 $115 ATC $110 $105 $100 $95 $90 $85 $80 AVC $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 0 1 2 3 5 6 Quantity Produced 7 8 9 10 11 The graph above shows the cost functions for a perfectly competitive profit maximizing firm. If the market price of the product is $70 per unit, the firm will produce units, will cover make an economic profit of dollars. dollars of its fixed cost, and will

6. The long-run supply curve for a particular type of kitchen knife is a hori- zontal line at a price of $3 per knife. The demand curve for such a kitchen knife is Qp = 50 – 2P where Q, is the quantity of knives demanded (in millions per year) and P is the price per knife (in dollars). 253 CHAPTER 7: PERFECT COMPETITION a. What is the equilibrium output of such knives? b. If a tax of $1 is imposed on each knife, what is the equilibrium output of such knives? (Assume the tax is collected by the government from the suppliers of knives.)