ECON-1006EL Study Guide - Midterm Guide: Marginal Revenue, Perfect Competition, Demand Curve
23 May 2018
School
Department
Course
Professor
Midterm 2
Chap 9: 1-10
Chap 10: 11-22
Chap 11: 23-25
Chap 12: 26-30
1. What’s perfect competition?
A market structure in which all firms in an industry are price takers, and in which there is
freedom of entry into and exit from the industry where price takers are a firm that can
alter its output and sales without affecting the market price of its product
2. Give me an example of a perfectly competitive product.
Although there are no perfectly competitive products the agriculture industry is the
closest thing to it as firms can enter and exit the market freely without impacting prices.
3. What’s the market demand curve for a perfectly competitive industry look like?
Looks normal, but a firm’s demand curve is a horizontal line through the equilibrium
point
4. How do you calculate average revenue?
Average Revenue
5. What’s perfectly competitive marginal curve look like?
Checkmark
6. 3 cost curves and comp. firms demand curve, which output should the firm make?
Check if MC=MR,
7. When will a firm shut down?
If price below the marginal cost and average cost
8. Given numerical value for a marginal cost, marginal revenue and price. Firm A should:
(is MC =MR, reduce output etc.)
find more resources at oneclass.com
find more resources at oneclass.com
