6. Power Printers Total Costs (per hour)
q TC
0 65
1 80
2 95
3 120
4 150
5 200
If the price of a printer is $50 in this perfectly competitive industry, what is the profit-maximizing rate of output?
7. Which of the following is NOT true in a perfectly competitive market?
a. There is free entry and exit into the industry.
b. Each firm produces a differentiated product.
c. Each firm faces a perfectly elastic demand curve.
d. Price is equal to marginal revenue at every output level for the firm.
8. A perfectly competitive firm should always continue to operate in the short run as long as:
a. P < ATC at the rate of output where MR = MC.
b. P < AVC at the rate of output where MR = MC.
c. MR > AVC at the rate of output where MR = MC.
d. MR > AFC at the rate of output where MR = MC.
9. A firm that makes zero economic profits:
a. Must eventually go bankrupt.
b. Should shut down.
c. Incurs a loss, but should not shut down.
d. Covers all its costs, including a provision for normal profit.
10. A monopoly firm is different from a competitive firm in that:
A. There are many substitutes for the monopolistâs product whereas the competitive firmâs demand curve is perfectly elastic.
B. The monopolistâs demand curve is perfectly inelastic, whereas the competitive firmâs demand curve is perfectly elastic.
C. The monopolist can influence the price in the market, whereas the competitive firm is a price taker.
D. All of the above
6. Power Printers Total Costs (per hour)
q TC
0 65
1 80
2 95
3 120
4 150
5 200
If the price of a printer is $50 in this perfectly competitive industry, what is the profit-maximizing rate of output?
7. Which of the following is NOT true in a perfectly competitive market?
a. There is free entry and exit into the industry.
b. Each firm produces a differentiated product.
c. Each firm faces a perfectly elastic demand curve.
d. Price is equal to marginal revenue at every output level for the firm.
8. A perfectly competitive firm should always continue to operate in the short run as long as:
a. P < ATC at the rate of output where MR = MC.
b. P < AVC at the rate of output where MR = MC.
c. MR > AVC at the rate of output where MR = MC.
d. MR > AFC at the rate of output where MR = MC.
9. A firm that makes zero economic profits:
a. Must eventually go bankrupt.
b. Should shut down.
c. Incurs a loss, but should not shut down.
d. Covers all its costs, including a provision for normal profit.
10. A monopoly firm is different from a competitive firm in that:
A. There are many substitutes for the monopolistâs product whereas the competitive firmâs demand curve is perfectly elastic.
B. The monopolistâs demand curve is perfectly inelastic, whereas the competitive firmâs demand curve is perfectly elastic.
C. The monopolist can influence the price in the market, whereas the competitive firm is a price taker.
D. All of the above
Related textbook solutions
Related questions
Consider the following table of costs for the Winsome Widget Factory, which operates in a perfectly competitive market. The market price faced by this firm is $6.00 per widget.
| Output | Total Cost |
| 0 | 100 |
| 10 | 150 |
| 20 | 180 |
| 30 | 200 |
| 40 | 240 |
| 50 | 300 |
| 60 | 375 |
| 70 | 475 |
| 80 | 600 |
| 90 | 750 |
| 100 | 1,000 |
a. Fill in the formula for AFC, AVC, ATC, MC, TR, MR, and Total Profit.
b. Fill in the missing values for TFC, TVC, AFC, AVC, ATC, MC, TR, MR, and Total Profit.
