The accompanying table gives cost data for a firm that is selling in a purely competitive market. We can infer that, at zero output, this firm's total fixed, total variable, and total costs are O $150, $25, and $175, respectively. O zero, $25, and $175, respectively. O $150, zero, and $150, respectively. O zero, zero, and zero, respectively.

Price (dollars) 8 7 6 5 4 3 2 1 0 80 O increase; increase; increase O remain same; remain same; decrease O decrease; remain same; decrease O decrease; decrease; decrease Short-run Short-run MC AC 100 110 The graph above shows the cost curves for a firm selling in a perfectly competitive market. If the market demand falls due to a recession, the long run equilibrium price will output will ., the firm's and industry output will Output (per day) Long-run AC

Which of the following best explains why a firm would not stop producing if the loss is less than its fixed costs? O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover ATC and some MC. O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover ATC and some FC. O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover AVC and some FC. O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover AVC and some MC.

Suppose we have a firm in a perfectly competitive market. Assume that we have the usual shaped cost curves. At a market price of $15 the profit maximizing firm produces 53 units. Something changes that causes the firm to produce a quantity of zero at a price of $15 in the short-run. Which of the changes below can explain the change in the firm's behavior? O An increase in the fixed cost and a decrease in the marginal cost. O An increase in the fixed cost. O An increase in the marginal cost. O A decrease in the market price.

Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm's total fixed cost is $600 and its total variable cost is $400. If the price of the product is $8 per unit, the firm should produce O less than 100 units of output. O The amount is impossible to determine from the information given. O 100 units of output. O more than 100 units of output.

Figure shows the cost structure of a firm in a perfectly competitive market. at the market price $30, the break-even output is: Р. $30-- $25 $13 $5 O a. 1,000 O b. 450 O c. 30 O d. 800 450 MC 800 1,000 AT AV

Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 90 70 60 ATC 40 30 20 AVC 10 + ++++ 10 15 20 3 30 35 o 5 QUANTITY (Thousands of jackets) 50 For each price in the following table, use the graph to determine the number ofr jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 10 20 32 COSTS (Dollars)

Price and costs (dollars) 20 10 L O 10 20 MC O always. ATC MR 40 30 Quantity (per day) The figure above shows a perfectly competitive firm. In the short run, the firm will shut down only if the AVC of producing 10 units is more than $20. only if the AVC curve reaches its minimum before 10 units are produced. only if the AVC of producing 10 units is less than $20.

Consider the perfectly competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. 18, 80 80 72 64 56 ATC 48 40 32 24 16 AVC 8 + MC O 3 12 15 18 21 24 27 30 QUANTITY OF OUTPUT (Thousands of pounds) COSTS (Dollars per pound)