If firms are making positive economic profits in the short run then in the long run Select one A the short run industry supply curve will shift leftward B industry output will rise and the price will rise C firms will leave the industry D firms will enter the industry Price takers are individuals in a market who Select one A select the average of prices available in a competitive market B have no ability to affect the price of a good in a market C select a price from a wide range of alternatives D select the lowest price available in a competitive market Many furniture stores run going out of business sales but never go out of business In order for the shut down decision to be the appropriate one the price of furniture must be than the average variable cost Select one A lower minimum B lower maximum C higher minimum D higher maximum In perfect competition Select one A goods are standardized and all market participants are price takers B some goods are standardized and consumers are price takers C some goods are standardized and producers are price takers D goods are standardized and producers are price takers A firm will be profitable if it produces at a point at which Select one a marginal revenue is below average total cost b price is below average total cost c price is below average variable cost d price is above average total cost Wenqin is a farmer and in the short run she produces 100 bushels of wheat Her average total cost per bushel is 1 75 total revenue is 450 and total fixed costs are equal to 100 Wenqin s Select one A average variable cost is equal to 1 25 B economic profit is equal to 250 C average fixed cost is equal to 1 50 D profit per bushel is equal to 2 75 If the long run market supply curve for a perfectly competitive market is horizontal then this industry is one that exhibits Select one A decreasing costs B constant costs C the absence of marginal costs D increasing costs In the short run if P ATC a perfectly competitive firm Select one A does not produce output and incurs an economic loss B produces output and earns an economic profit C produces output and incurs an economic loss D produces output and earns zero economic profit A perfectly competitive firm is definitely earning an economic profit when Select one A P AVC B P ATC C MR MC D P MC Zoe s Bakery determines that P ATC and P AVC Zoe should Select one A raise the price until she has maximized her profits B shut down immediately as she is taking an economic loss C continue to operate even though she is taking an economic loss D continue to operate as she is making an economic profit A perfectly competitive firm will incur an economic loss but will continue producing output in the short run if the price is Select one A less than marginal cost B greater than average variable cost but less than average total cost C greater than average fixed cost and less than average variable cost D greater than average total cost The marginal revenue received by a firm in a perfectly competitive market Select one A is less than the market price B increases with the quantity of output sold C is equal to its average revenue D is greater than the market price Zoe s Bakery operates in a perfectly competitive industry When the market price of iced cupcakes is 5 the profit maximizing output level is 150 cupcakes Her average total cost is 4 and her average variable cost is 3 Zoe s marginal cost is and her short run profits are Select one A 5 150 B 1 300 C 1 150 D 5 300 When a perfectly competitive industry is in long run equilibrium its firms Select one A earn more than zero economic profits B are not in short run equilibrium C combine their variable and fixed resources inefficiently D allocate all of their resources efficiently If a perfectly competitive firm is producing a quantity where MC MR then profit Select one A can be increased by decreasing the price B is maximized C can be increased by increasing production D can be increased by decreasing production In perfect competition Select one A at any price the more sold the higher is a firm s marginal revenue B the firm s total revenue curve is a downward sloping line C a firm s total revenue is found by multiplying the market price by the firm s quantity of output D the firm s total revenue curve is nonlinear A firm will be profitable if it produces at a point at which Select one a marginal revenue is below average total cost b price is below average variable cost c price is below average total cost d price is above average total cost If a competitive firm shuts down for a holiday it must still pay its Select one a total cost b marginal cost c fixed cost d variable cost A firm is a price taking producer when Select one a its actions cannot affect the market price of the product b it is the lowest priced firm in the industry c it will consistently charge a price less than the average industry price d it is the highest priced firm in the industry The resources needed for growing cucumbers are relatively abundant Many new firms could enter this industry and not change costs If that happens Select one a the long run industry supply curve will be horizontal b the long run industry supply curve will slope up c the long run industry supply curve will slope down d the average fixed cost curve will shift up A perfectly competitive firm will continue producing in the short run as long as it can cover its Select one A fixed cost B average fixed cost C variable cost D total cost A perfectly competitive firm is selling a product at the market price of 11 It produces and sells the profit maximizing quantity of 20 units and at this level of output its average total cost is 10 and its average variable cost is 8 What is the firm s level of profit Select one a 350 b 20 c 220 d 60 If a firm s economic profits are equal to zero its accounting profits are most likely Select one A less than zero B less than economic profits C equal to zero D greater than economic profits Quantity of cherries in pounds Price per pound of cherries Total cost 1 6 6 2 6 11 3 6 13 4 6 16 5 6 20 6 6 28 7 6 38 The table above gives the total cost information for Hank and Helen s cherry farm They sell their cherries in a perfectly competitive market where the price is 6 00 per pound If Hank and Helen produce and sell 5 pounds of cherries what is their total …