Price P₁ P2 P3 PA Quantity MC If the short-run price is. , the perfectly competitive firm will A) P1; break even B) P2; break even C) P3; earn positive economic profit D) P4; earn positive economic profit E) P2; negative economic profit AVC ATC

MC АТС $25.00 AVC $19.50 -- $15.00 $12.50 - - 30 40 50 60 Output (Q) For the firm shown in the diagram above, its Long Run Supply Curve is its curve for any price greater than ATC; $19.50 MC; $12.50 AVC; $12.50 MC; $19.50

s 1, 12 & 13 Assignment Saved Help Save & Exit Assume a purely competitive increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will Multiple Choice leave the industry, price will fall, and quantity produced will rise. enter the industry and price and quantity will both rise. leave the industry and price and quantity will both rise. leave the industry, price will fall, and quantity produced will fall.

P P₂ B C Q₂ D MC Firm entry occurs. Output Quantity Refer to the above figures for the typical firm in a competitive market. If the market demand curve is D3, what happens in the long run? A Firm exit occurs. ATC Most firms do nothing. D₂ Some existing firms increase capital input. D₂ D₁ Quantity

39) If a perfectly competitive firm operates in the short run but exits the industry in the long run, then the firm's short run condition isA) TR > TVC and TR < TC. B) TR > TC.C) TR < TVC. D) TR < TFC.

Marginal revenue is A) the change in total revenue from a one-unit increase in the quantity sold. B) less than price for a perfectly competitive firm. C) another name for total revenue. D) the economic profit from producing an additional unit of output. E) the change in total cost from producing an additional unit of output.

ume the pizza market is a perfectly competitive constant cost industry, and all firms have identical homogenous firms). The market demand and market supply functions for this perfectly competit stry are given below. L 0 1 2 3 4 5 6 7 8 9 q=TP 0 10 20 30 40 50 60 70 80 90 TC 100 205 2.45 280 340 430 545 720 930 1190 P = 30.5-.005Q P = 1.7+.003Q TFC TVC 100 0 100 105 20.50 10.50 100 145 12.25 7.25 100 180 9.33 6.00 100 240 8.50 6.00 100 330 8.60 6.60 100 445 9.08 7.42 100 620 10.29 8.86 100 830 11.63 10.38 100 1090 13.22 12.11 ATC AVC MC 10.50 4.60 3.50 6.00 9.00 11.5 17.50 21.00 26.00

20) What will a firm in a perfectly competitive industry do in the short-run if the price of its product decreases below the firm's average variable costs but still above average total costs? A) Do nothing B) Increase production C) Decrease production D) Shut down

Suppose that the demand curve faced by a firm is downward sloping. Which of the following statements is true? Question 5Answer a.  The firm faces constantly changing production technology b.  The firm operates in a perfectly competitive market c.  The firm’s marginal revenue is equal to the market price d.  The firm is not a price-taker