In the model of perfect competition, firms produce a: O differentiated product with considerable control over price. standardized product with no control over price. standardized product with considerable control over price. O differentiated product with no control over price. O standardized or differentiated product with some control over price.
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- In the short run , a profit -maximizing firm will produce additional units of a product as long as- a) price at least covers average fixed cost b) total revenue is increasing c) a change in the rate of technical substitution d) elasticity of demand is infinite e) price at least covers average variable costGenerally, firm demand within an industry is:A. Likely to have greater price elasticity than the industry demand as a wholeB. Likely to have less price elasticity than the industry as a demand wholeC. Not relevant to industry demandD. None of the aboveA large number of sellers all selling an identical product implies which of the following? A) the inability of any seller to change the price of the product B) horizontal market supply curves C) vertical market supply curves D) large losses incurred by all sellers E) market chaos
- In a competitive market, the long-run demand is given by P = 20 - (0.01)*q Firms in the industry have as their cost structure the expression C = q3 - 5q2 + 10q. Determine: (a) equilibrium price b) Quantity produced-sold of the firm. c) What quantity is traded in the market? d) Over what time period does this market work? (short or long term?) e) What is the profit of the individual firm? f) What will be the behavior of the individual firm, will it exit or stay in the market?Which of the following is true about competitive firms? A firm with fixed/sunk costs receiving a price above its average variable cost will choose to stay in the industry in the short-run despite earning losses. Produce identical goods. An individual firm is too small relative to the market to impact the price. Is willing to supply a greater quantity if there is a reduction in the firm's marginal cost. Earn zero profits in the long-run because firms are free to enter or exit the industry over the long-run. They produce up until the point where the price equals the marginal cost of production.For a firm with a downward-sloping demand curve, which of the following is true at the profit-maximizing level of output? For this case, let's assume that marginal costs are positive.a) demand is perfectly inelastic b) demand is inelastic but not perfectly inelastic c) demand is unit-elastic d) demand is elastic but not perfectly elastice) demand is perfectly elastic
- In perfect competition, a firm can maximize profit by producing at a quantity where price Is lower than the firm's competitors. Is equal to the firm's marginal revenue. Is equal to the firm's average total cost. Is equal to the firm's marginal cost.High total revenue does not necessarily mean maximum profit. Explain this statementWhen the competitive firm maximizes profit, its marginal cost of an additional unit of output is always equal to the: Minimum of average total cost. Minimum total cost. Price. Maximum total revenue.
- Goods sold in a perfectly competitive market are quite differentiated. True/FalseA purely competitive seller is Multiple Choice both a "price maker" and a "price taker." neither a "price maker" nor a "price taker." a "price taker." a "price maker."Assume that price is greater than average variable cost. If a perfectly competitive seller is producing at an output where price is $11 and the marginal cost is $14.54, then to maximize profits the firm should continue producing at the current output. produce a larger level of output. produce a smaller level of output. not enough information given to answer the question.