EC 111 Chapter 13 || with 100% Error-free Answers.
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EC 111 Chapter 13
Institution
EC 111 Chapter 13
A firm is a price taker if it takes the market price as given and ... correct answers sells goods at that price
A market in which economic forces operate unimpeded is called a correct answers perfectly competitive market
A perfectly competitive market exhibits the following 2 conditions corre...
EC 111 Chapter 13 || with 100% Error-free Answers.
A firm is a price taker if it takes the market price as given and ... correct answers sells goods at
that price
A market in which economic forces operate unimpeded is called a correct answers perfectly
competitive market
A perfectly competitive market exhibits the following 2 conditions correct answers 1. There are
no barriers to entry
2. The firm sells at the price dictated by the market
A seller who sells at the price determined by market supply and demand as given is called a
correct answers price taker
Barriers of entry can be (3) correct answers 1. Economic
2. Social
3. Political
For a perfect competitor, the market price determines the firm's correct answers marginal
revenue curve
If a firm is earning just enough to cover the opportunity cost of the owner of the firm, it is
earning what type of profit? correct answers normal profit
If firms are making an economic loss in a perfectly competitive industry, the market supply
curve will eventually shift to the ... correct answers right
If firms are making an economic profit in a perfectly competitive industry correct answers new
firms will enter the industry
True or False: If you know marginal revenue and marginal cost of the last unit produced, you can
calculate total profit. correct answers False
In the long run, perfectly competitive firms earn zero economic profit due to correct answers lack
of barriers to entry and exit of firms
True or False: Maximizing profit means maximizing profit per unit. correct answers False
Perfectly competitive firms cannot earn economic profit in the long run because correct answers
equilibrium price will fall as new firms enter the market until economic profits are zero
The change in total cost associated with a change is called correct answers marginal cost
The change in total revenue associated with a change in quantity is called correct answers
marginal revenue
, The demand curve facing a perfectly competitive firm is correct answers horizontal (flat)
The goal of a firm is to maximize correct answers profits
The goal of the perfectly competitive firm is to correct answers maximize profits
True or False: The marginal cost curve is a perfect competitor's supply curve because a firm
maximizes profits where marginal cost equals marginal revenue. correct answers True
The marginal cost curve is a perfect competitor's supply curve because it maximizes profit by
producing a quantity where correct answers marginal cost equals marginal revenue, which is the
market price
The marginal cost curve of a perfectly competitive firm is also its _______ curve. correct
answers supply
The marginal curve is a perfect competitor's supply curve because it maximizes profit by
producing a quantity where correct answers marginal cost equal marginal revenue, which is the
market price
True or False: The marginal revenue for a perfect competitor is the market profit. correct answers
True
The market supply curve is obtained by _____________ summation of the supply curves of all
the firms in a perfectly competitive market correct answers horizontal
True or False: The opportunity cost of the owner of a firm is part of a firm's economic cost.
correct answers True
True or False: The owner of a perfectly competitive firm sets prices based on cost mark-up.
correct answers False
The price of a perfectly competitive firm's good is determined by the correct answers market
The relationship between economic profit and normal profit is that (2) correct answers 1.
Economic profit is the profit above normal profit
2. Normal profit is built into the costs of the firm; economic profit is not
The supply curve of a perfectly competitive firm is the segment of the marginal cost curve that
lies correct answers above the variable cost curve
When the ATC curve is above the marginal revenue curve, the firm makes correct answers a loss
When the ATC curve is below the marginal revenue curve, the firm makes correct answers a
profit
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