Question 1

Suppose a firm in a competitive market reduces its output by 20 percent. As a result, the price of its output is likely to

Accepted Answer

A)  increase.
B)  remain unchanged.
C)  decrease by less than 20 percent.
D)  decrease by more than 20 percent.E) B) and D)
F) B) and C)

Question 2

Table 14-1 
-Refer to Table 14-1. The price and quantity relationship in the table is most likely a demand curve faced by a firm in a

Accepted Answer

A)  monopoly.
B)  concentrated market.
C)  competitive market.
D)  strategic market.E) A) and B)
F) A) and C)

Question 3

If there is an increase in market demand in a perfectly competitive market, then in the short run prices will

Accepted Answer

A)  rise.
B)  remain unchanged at the minimum of average total cost.
C)  fall.
D)  remain unchanged at the minimum of marginal cost.E) A) and D)
F) All of the above

Question 4

​Consider a firm operating in a perfectly competitive market. At its current output of 200 units, marginal revenue is $25. At this output, average total cost is decreasing and equals $22. Given this information, what should the firm do?

Accepted Answer

A)  ​Continue to produce 200 units, because this maximizes profits.
B)  ​Increase output beyond 200 units, since a higher output will yield the profit maximizing output level.
C)  ​Decrease output below 200 units, since a lower output will result in the profit maximizing output level.
D)  ​More information is needed to determine the firm's next step.E) None of the above
F) All of the above

Exam 14: Firms in Competitive Markets

If there is an increase in market demand in a perfectly competitive market, then in the short run prices will

Correct Answer
verified

Table 14-1 -Refer to Table 14-1. The price and quantity relationship in the table is most likely a demand curve faced by a firm in a

Correct Answer
verified

Consider a firm operating in a perfectly competitive market. At its current output of 200 units, marginal revenue is $25. At this output, average total cost is decreasing and equals $22. Given this information, what should the firm do?

Correct Answer
verified

Suppose a firm in a competitive market reduces its output by 20 percent. As a result, the price of its output is likely to

Correct Answer
verified

Exam 14: Firms in Competitive Markets

If there is an increase in market demand in a perfectly competitive market, then in the short run prices will

Correct AnswerverifiedShow Answer

Table 14-1 -Refer to Table 14-1. The price and quantity relationship in the table is most likely a demand curve faced by a firm in a

Correct AnswerverifiedShow Answer

​Consider a firm operating in a perfectly competitive market. At its current output of 200 units, marginal revenue is $25. At this output, average total cost is decreasing and equals $22. Given this information, what should the firm do?

Correct AnswerverifiedShow Answer

Suppose a firm in a competitive market reduces its output by 20 percent. As a result, the price of its output is likely to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Consider a firm operating in a perfectly competitive market. At its current output of 200 units, marginal revenue is $25. At this output, average total cost is decreasing and equals $22. Given this information, what should the firm do?

Correct Answer
verified

Correct Answer
verified