Alpha, a company is selling in a perfectly competitive market. Its output is 100 units which sells for $4 each. At this level of output, total cost is $500, total fixed cost is $110, and marginal cost is constant at $4. In the short run, the firm should Group of answer choices reduce output to about 40 units reduce output to about 80 units continue to produce 100 units produce zero units of output There is not enough information to tel

Under conditions of perfect or pure competition, or close to those conditions, producers (firms) are what are called “price takers”. This means that the price for the product that they are selling is determined by the market.  No matter how little or how much product they supply, they can sell all they want at that price.  If they were to price their product higher, they will sell zero.  Which of the following is true? The price is equal to marginal revenue but not average revenue The price is equal to marginal revenue and average revenue The price is equal to average revenue but is not equal to marginal revenue The price is above both marginal revenue and average revenue

The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a firm are shown in the figure below. The market price is $26. Instructions: Use the tool provided (Pt. A) to identify the profit-maximizing output. Then use the tool "Profit" to draw the area of profit (or loss) that occurs at this level of output. Position this rectangle by dragging on the vertices. Price/Cost ($) 50 r Tools MC 40 Pt. A Profit ATC 30 AVC 20 10 10 20 30 40 50 Quantity Instructions: Round your answer to the nearest whole number. Use a negative sign if necessary. At the profit-maximizing level of output, average total cost is $ and profit is $

Which of the following characteristic(s) of competitive markets is(are) necessary for a perfectly competitive firm to be a price-taker? i) There are many sellers and buyers. ii) Firms produce identical products. iii) Sellers and buyers are well informed. iv) There is no restriction on entry or exit. Group of answer choices (i) and (ii) only (i), (ii) and (iii) only (iii) only (iv) only

A profit-maximizing firm in the short run will expand output until marginal cost begins to rise until total revenue equals total cost until marginal cost equals average variable cost as long as marginal revenue is greater than marginal cost

if the price is less than lowest average variable cost the firm will shut down

In the short run, the best policy for a perfectly competitive firm is to Group of answer choices shut down its operation if price ever falls below average total cost. produce and sell its product as long as price is greater than average variable cost. shut down its operation if price falls between average total cost and average variable cost. a and c none of the above

Table Cost.EX2.2: Data for a Competitive Firm Marginal Marginal Output Cost Revenue (Q) (MC) (MR) 10 $3.00 $4.00 11 $3.50 $4.00 12 $4.00 $4.00 13 $4.50 $4.00 14 $5.00 $4.00 15 $5.50 $4.00 16 $6.00 $4.00 Refer to Table Cost.EX2.2. If the firm wishes to maximize profit, it should produce units. O 10 O 12 O 11 6.

constant SavedSaved Question 11 Question 12 Which graphs represents the long run equilibrium for a perfectly competitive firm? P P MC ATC D P MC D ATC 0 0 Quantity (A) Quantity MR MR (B) MC MC P ATC D=MR ATC D 0 Quantity (C) 0 Quantity MR (D) Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a A b B C C d D Question 13 Please review the graph below containing a d

Your company operates in a perfectly competitive market. One of your business partners recommends creating an aggressive advertising campaign for your product in order to boost sales. What is wrong with this reasoning?