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- In a perfectly competitive market, when are economic profits possible? O Long-run O Economic profits are always zero, firms earn normal profit O Any time, it depends on the indivual firm O Short runQUESTION 16 Which of the following is true for a perfectly competitive firm? O The price of the product is equal to marginal revenue at all times. O The price of the product is equal to marginal cost at all times. O Marginal cost is equal to marginal cost at all times O Total revenue is equal to total cost at all times.red 1.00 pn ge Firm A operates in perfect competition, and the price the firm faces is greater than its average variable cost and less than its average total costs. If the firm does not expect price to change, firm A should: O a Shut down in the short run but operate in long run O b. Shut down in short run and in long run Oc. Operate in short run but shut down in long run Od. Shut down immediately Jump to O a. Increase production/output Ob. Shut down business Oc. Decrease production/output Od. Keep current production level Under perfect competition, if firm A's marginal revenue is greater than its marginal cost, what should firm A do to maximize its profit: AVAAN LUV1000 Evaluations Test 2-July 14th Which of the below is the difference between economic profit and accounting profit O a. Opportunity Cost O b. Revenue difference Oc: Explicit cost O d. Fixed cost Next page O e. Variable cost Next Activity Next Activity
- Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, and the price of a doughnut is 10 cents, then this firm: 0.35 Marginal Cest 0.30 0.25 0.20 Average Tetal Cost 0.10 0.05 10 20 30 40 50 e 70 B0 90 Quantity oughnuts/ay O should shut down. O will earn an economic loss. O should produce 50 doughnuts. O should shut down in the long run.Refer to the above graph for a purely competitive firm in the short run. The price of the firm's product is given by: TC TR 9,800 S,600 2,100 300 800 1,400 Output (Q) Select one: O A. $7 OB. $10 O C. $8 OD. $9D Question 6 Consider the graph below. Should this firm stay open or shut down in the short run and why? ATC MC ATC* A AVC* pe 10 Stay open because their loss from operating is greater in magnitude than their fixed costs Stay open because their loss from operating is less in magnitude than their fixed costs Shut down because their loss from operating is greater in magnitude than their fixed costs O Shut down because their loss from operating is less in magnitude than their fixed costs B AVC -MR
- Question What should the perfectly competitive firm do in the short run, and why? What will this firm do in the long run? Current production = 10,000 Current price = $15 Total cost $300,000 Fixed cost = $200,000 Marginal cost = $15 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a C d Shutdown in the short run, because their shutdown loses will be $100,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Shutdown in the short run, because their shutdown loses will be $50,000 smaller compared to their loses if they stay open. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should exit the market. Continue to produce in the short run, because their loses will be $50,000 smaller compared to their loses if they shut down. In the long run they should…In the short run, a perfectly competitive firm Select one: a. can earn a small economic profit while being shut down. b. incurs an economic loss if it shuts down. O c. does not consider total revenue in its shut down decision. O d. shuts down if it incurs any economic loss.7. Assume that a purely competitive firm has the schedule of average and marginal costs given in the table below. Complete the short-run supply schedule and profits or losses for this firm. Outpu AFC AVC ATC MC t 0 1 2 3 4 5 6 7 8 9 10 P600 P200 P800 P200 300 150 450 100 200 140 340 120 150 145 295 160 120 160 280 220 100 180 280 280 86 205 291 360 76 232 314 460 66 276 342 580 60 320 380 720 Quantity Price supplied (-) P P580 460 360 280 220 160 Profit (+) or loss 120
- Question 42 If a perfectly competitive firm finds that price is less than average total cost, but greater than average varabie cost A. it should shut down in the short run, and remain shut down in the long run B. it should shut down in the short run, but re-open in the long run C. it should continue to operate in the short run, but shut down in the long run O D. it should continue to operate in both the short run and in the long run. > A Moving to another question will save this response. DELLIf Doug's Dry Cleaners operates in a perfectly competitive market, and its shutdown price is $12/shirt, what does this firms short run supply curve look like? Select one: a. starting from price at which Doug starts making some economic profit, the short run supply curve is his MC curve. O b. it is an upward sloping curve starting at origin C Doug supplies nothing up to $12/shirt; after that it is his MC curve d. Doug supplies nothing up to $12/shirt; after that it is his AVC curve e. None of the answers offered are accurate.58 When a perfectly competitive market is in long-run equilibrium, the firms supplying in that market are earning zero economic profit. E of Select one: OTrue OFalse
