Chapter 08 – Pure Competition in the Short Run
Answer the question on the basis of the following cost data for a purely competitive seller:
100. Refer to the above data. If product price is $60, the firm will:
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102. Refer to the above data. If product price is $25, the firm will:
103. Assume a purely competitive firm is selling 200 units of output at $3 each. At this output
its total fixed cost is $100 and its total variable cost is $350. This firm:
Chapter 08 – Pure Competition in the Short Run
104. Refer to the above diagram. This firm will earn only a normal profit if product price is:
105. Refer to the above diagram. The firm will realize an economic profit if price is:
106. Refer to the above diagram. The firm will produce at a loss if price is:
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107. Refer to the above diagram. The firm will shut down at any price less than:
108. Refer to the above diagram. The firm’s supply curve is the segment of the:
Answer the question on the basis of the following cost data for a firm that is selling in a
purely competitive market.
Chapter 08 – Pure Competition in the Short Run
109. Refer to the above data. The marginal cost column reflects:
110. Refer to the above data. At 6 units of output, total fixed cost is ____ and total cost is
111. Refer to the above data. At 3 units of output, total variable cost is ____ and total cost is
____
Chapter 08 – Pure Competition in the Short Run
112. Refer to the above data. We can infer that, at zero output, this firm’s total fixed, total
variable, and total costs are:
113. Refer to the above data. If the market price for this firm’s product is $87, it will produce:
114. Refer to the above data. If the market price for this firm’s product is $68.10, it will
produce:
Chapter 08 – Pure Competition in the Short Run
115. Refer to the above data. If the market price for this firm’s product is $35, it will produce:
117. Refer to the above data. If the market price for this firm’s product is $15, it will produce:
Chapter 08 – Pure Competition in the Short Run
118. A purely competitive seller should produce (rather than shut down) in the short run:
Answer the question on the basis of the following cost data for a purely competitive seller:
119. The above data are for:
Chapter 08 – Pure Competition in the Short Run
120. Refer to the above data. At 5 units of output average fixed cost, average variable cost,
121. Refer to the above data. The marginal cost of the fifth unit of output is:
122. Refer to the above data. If product price is $75, the firm will produce:
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123. Refer to the above data. Given the $75 product price, at its optimal output the firm will:
124. In the short run, a purely competitive firm will earn a normal profit when:
The following table applies to a purely competitive industry composed of 100 identical firms.
Chapter 08 – Pure Competition in the Short Run
125. Refer to the above table. The equilibrium price in this purely competitive market is:
126. Refer to the above table. At the equilibrium price, each of the 100 firms in this industry
will produce:
127. Refer to the above table. For each of the 100 firms in this industry, marginal revenue and
total revenue will be:
Chapter 08 – Pure Competition in the Short Run
128. Refer to the above table. If each of the 100 firms in the industry is maximizing its profit,
each must have a marginal cost of:
129. Refer to the above table. If each of the 100 firms in the industry is maximizing its profit
and earning only a normal profit, each must have a total cost of:
130. Refer to the above table. If each of the 100 firms in the industry is maximizing its profit
and earning only a normal profit, each must have an average total cost of:
Chapter 08 – Pure Competition in the Short Run
131. (Consider This) An unprofitable motel will stay open in the short-run if:
132. (Consider This) An otherwise unprofitable motel located on a largely abandoned
roadway might be able to stay open for several years by:
133. (Last Word) Fixed costs for a firm are analogous to:
Chapter 08 – Pure Competition in the Short Run
134. (Last Word) Oil wells and seasonal resorts will often shut down temporarily because:
135. (Last Word) Temporary shutdowns of firms are most widespread when:
136. Oligopoly firms may produce either standardized or differentiated products.
Chapter 08 – Pure Competition in the Short Run
137. The term imperfect competition refers to every market structure besides pure
competition.
138. Firms in a monopolistically competitive industry have no reason to engage in nonprice
competition because their products are uniquely different from other sellers in the market.
139. Although individual purely competitive firms can influence the price of their product,
these firms as a group cannot influence market price.
140. In a purely competitive industry competition centers more on advertising and sales
promotion than on price.
Chapter 08 – Pure Competition in the Short Run
141. Price and marginal revenue are identical for an individual purely competitive seller.
142. The demand curve for a purely competitive industry is perfectly elastic, but the demand
curves faced by individual firms in such an industry are downsloping.
143. Marginal revenue is the addition to total revenue resulting from the sale of one more unit
of output.
144. In maximizing profit a firm will always produce that output where total revenues are at a
maximum.
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145. In the short run a competitive firm will always choose to shut down if product price is
less than the lowest attainable average total cost.
146. A competitive firm will produce in the short run so long as its price exceeds its average
fixed cost.
Chapter 08 – Pure Competition in the Short Run
147. Refer to the above diagram. This firm will maximize profits by producing output D.
148. Refer to the above diagram. At the profit-maximizing output total revenue will be
0GLD.
149. Refer to the above diagram. At output C production will result in an economic profit.
150. Refer to the above diagram. At any price below R the firm will shut down in the short
run.
Chapter 08 – Pure Competition in the Short Run
151. Refer to the above diagram. If demand fell to the level of FNJ, there would be no output
at which the firm could realize an economic profit.
152. Refer to the above diagram. If the firm produced D units of output at price G, it would
earn a normal profit.
153. The short-run supply curve slopes upward because producers must be compensated for
rising marginal costs.