Which of the following does not characterize a perfectly competitive firm that has shut down in the short run?
total revenue equals zero
variable costs equal zero
the firm suffers a loss
fixed cost is positive
fixed cost is zero
Perfectly competitive firms are price takers because
all small firms must take the price set by the largest firm in the market
firms take the price that government determines is a fair price
each firm is small and goods are perfect substitutes for one another
free entry and exit in the short run creates a constant market price in the long run
high barriers to entry force firms to compete by charging lower prices than other firms in the industry
If the market price in Exhibit 8-13 is $6 what is the greatest possible short-run profit for this perfectly competitive firm?
If as a firm increases its rate of output total cost increases as well
profit cannot be maximized
revenue cannot be maximized
cost cannot be minimized
marginal cost is increasing
marginal cost is positive
Which point in Exhibit 8-3 indicates the quantity at which this firm will maximize profit?
either point b or point d
Perfectly competitive firms respond to changing market conditions by varying their
Which of the following would not help identify market structure?
number of firms in the industry
type of product produced in the industry
ease of entry into the industry
forms of competition among firms in the industry
price of the good
Which of the following is not characteristic of perfect competition?
many buyers and sellers
brand name advertising
fully informed buyers and sellers
free entry and exit of firms
Which of the following is not necessarily a characteristic of perfect competition?
a large number of buyers and sellers
a homogeneous product
easy entry and exit in the long run
Business-class airline tickets cost much more than coach-class tickets because compared to householders businesspeoples demand for travel is
not a factor in the cost of airline tickets
In the short run if a firm shuts down its loss is equal to
its variable costs
its fixed costs
fixed costs minus variable costs
fixed costs minus total revenue
In Exhibit 9-18 how does market segment A differ from market segment B?
demand is relatively more elastic in segment A than in segment B
demand is relatively more income elastic in segment A than in segment B
demand is relatively more income elastic in segment B than in segment A
there are more consumers in segment A than in segment B
demand is relatively more inelastic in segment A than in segment B
An industry consists of all firms that supply output to a particular market.
In Exhibit 9-1 the marginal revenue of the sixth unit is
From the following demand schedule for a monopolist what is the marginal revenue associated with the sale of the fourth unit?
marginal revenue cannot be determined from the information given
Monopolists always earn positive short-run economic profit.
A natural monopoly results when a firm has
official approval to produce a product
decreasing average costs over the range of market demand
exclusive use of a natural resource
The profit-maximizing output and price for the firm in Exhibit 9-3 which charges the same price to all customers are
117 and $14
150 and $22
150 and $14
117 and $22
117 and $24
In Exhibit 9-2 the marginal revenue of the fourth unit is
The total revenue for the firm in Exhibit 9-3 a monopolist that maximizes profit while charging all customers the same price is
For a monopolist P < MR at all quantities.
For a monopolist if marginal revenue is $40 total revenue is
Which of the following is true of monopoly?