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rigante exam #3
Terms in this set (20)
when a price is less than average total cost, profits for the firm are
Which of the following is true if a firm increases its level of output by one unit and profits decrease?
marginal revenue is less than marginal cost
A monopolistically competitive firm operates
where average total cost is decreasing in the long run
the difficulty of cooperating is exemplified by
the prisoners dilemma game
Which of the following market structures charge a price equal to marginal cost when maximizing profits?
which of the following is a characteristic of a monopoly?
barriers to entry
Which of the following explains why, from society's standpoint, cooperation among oligopolists is undesirable?
it leads to output levels that are too low and prices that are too high
Which of the following characteristics describes a competitive market?
a market where firms sell a differentiated product
a firm in a competitive market can change the market price by changing its own production level
false. in a competitive market firms are price takers
A market with many buyers and sellers trading a nearly identical product describes a(n)
Firms in a competitive market are considered price takers because
no individual buyer or seller can affect the market price
If a firm in a competitive market doubles the quantity of units sold, total revenue will exactly double.
Farmer Brown sells sweet corn in a competitive market. When Farmer Brown sells 10 dozen ears of sweet corn, his total revenue is $30. When Farmer Brown sells 20 dozen ears of sweet corn, his total revenue is $60. Farmer Brown's average revenue is ____________ per dozen and his marginal revenue from selling the 20th dozen _________________.
is $3; is also $3
If a firm in a competitive market decreases the quantity of output sold, total revenue should
Which of the following would be an example of a firm in a competitive market?
an Iowa corn farmer
In a competitive market, an individual firm
has little to no effect on the market price
For all firm types price equals marginal revenue, and for competitive firms price equals average revenue.
ABC Co. brings in $3,400 in revenue from selling 425 units of its product and $3,404 in revenue from selling 426 units of its product. Which of the following conclusions can be drawn from this information?
The marginal revenue of the 426th unit is $4 and ABC Co. does not operate in a competitive market.
Which of the following is considered a characteristic of a competitive market?
-producers sell nearly identical products
-there are many buyers and sellers in the market
If a firm in a competitive market increases the quantity of output sold, total revenue should
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