Consider a market with many firms that have different cost structures.
Unless shutdown or exit is optimal, every firm expands production until ___________.
A.
marginal product is maximized.
B. marginal revenue, marginal cost, and price are all equal
(MR = MC = P)
C. marginal revenue is equal to the minimum of the short-run average total cost.
D. marginal cost is minimized.
To construct the supply curve in a market with many firms with different cost structures, the ___________.
A.
individual supply curves for each firm are added together.
B.
individual average variable cost curves are added together.
C.
minimums of theâ firms' marginal cost curves are linked together.
D.
minimums of theâ firms' long-run average total cost curves are linked together.
The equilibrium price is the ___________.
A.
âlong-run average total cost of the last entrant into the market.
B.
the average marginal cost of the firms.
C.
the long-run average total cost of the first entrant into the market.
D.
minimum of the average variable cost of the smallest firm in the market.
In terms of economic profits, early market entrants earn
(negative
zero
positive)
economic profits and the last entrant earns
(negative
zero
positive)
economic profits.
A perfectly competitive firm will choose to shut down when the (price (marginal revenue)/ average total cost) intersects the marginal cost curve below the ( total cost curve average variable cost curve ).
Therefore, the short-run supply curve for a perfectly competitive firm is represented by __________.
A. the portion of the average variable cost curve below marginal cost. B. the portion of the average variable cost curve above marginal cost. C. the portion of the marginal cost curve above the average total cost. D. the portion of the marginal cost curve above average variable cost.
In the long run, the supply curve for a perfectly competitive firm is represented by __________.
A. the portion of the marginal cost curve above the average total cost. B. the portion of the marginal cost curve above average variable cost. C. the portion of the average variable cost curve below marginal cost. D. the portion of the average variable cost curve above marginal cost.
