Compared to the short-run industry supply curve, the long-run industry supply curve will be more A. elastic. B. inelastic. C. steeply sloped. D. profitable. E. accurate.

Which of the following will happen in response if perfectly competitive firms are earning positive economic profit? A. Firms will exit the industry. B. The short -run industry supply curve will shift right. C. The short -run industry supply curve will shift left. D. Firm output will increase. E. Market price will increase

Which of the following is generally true for perfect competition? I. There is free entry and exit II. Long -run market equilibrium is efficient. III. Firms maximize profit at the output level where P=MC. A. I only B. II only C. III only D. I and II only E. I, II, and III

(a) What are commodities? (b) Why must perfectly competitive markets always deal in commodities? (c) What would happen to a perfectly competitive market if it stopped dealing in commodities? Explain your answer.

In the long run, a perfectly competitive firm will earn a. a negative market return. b. a positive profit. c. a loss. d. a normal profit. e. excess profit.

Which of the following is true for a perfectly competitive industry? A. There are many firms, each with a large market share. B. The firms in the industry produce a standardized product. C. There are barriers to entry. D. There are barriers to exit. E. There are a few firms, each with a small market share.

Suppose that paper is produced in a perfectly competitive, increasing-cost industry. A. Draw correctly labeled side-by-side graphs for a representative firm and for the paper market in longrun equilibrium. i. Label the market equilibrium price

$$”P_{M1}”$$

and the equilibrium quantity

$$”Q_{M1}”$$

ii. Label the firm's marginal cost

$$”MC_1”$$

its average total cost

$$”ATC_1,”$$

its demand curve

$$”D_{F1}$$

and its profit-maximizing price and quantity

$$”Q_{F1}”$$

and

$$”P_{F1}”$$

B. Now suppose that increased reliance on digital communications causes a decrease in the demand for paper. Show the following on the graphs you drew for part (a): i. The new short-run market equilibrium price and quantity, labeled

$$”P_{M2}”$$

and

$$”Q_{M2}$$

ii. The new short-run profit-maximizing price and quantity for the representative firm, labeled

$$”P_{F2}”$$

and

$$Q_{F2}”$$

C. Now suppose the market and the representative firm have adjusted to a new long-run equilibrium. i. Label the new equilibrium market price and quantity

$$”P_{M3}”$$

and

$$”Q_{M3}”$$

ii. Explain how and why the representative firm's new average total cost curve differs from

$$ATC _1$$

iii. Draw the long-run supply curve for the market and label it "LRS."

How does a monopoly differ from a perfectly competitive industry with the same costs? I. It produces a smaller quantity. II. It charges a higher price III. It earns normal profit in the long run. A. I only B. II only C. III only D. I and II only E. I, II, and III

Explain whether each of the following is a perfectly competitive market. For each market that is not perfectly competitive, explain why it is not.

Automobile manufacturing

Bill gets a job delivering pizzas. The pizza company makes him mount a sign on the roof of his car. The frontal area of the sign is A = 0.612 $ft^2$, and he estimates the drag coefficient to be CD = 0.94 at nearly all air speeds. Estimate how much additional money it costs Bill per year in fuel to drive with the sign on his roof compared to without the sign. Use the following additional information: He drives about 10,000 miles per year at an average speed of 45 tnph. The overall car efficiency is 0.332, ρfuel = 50.2 $lbm/ft^3$, and the heating value of the fuel is $1.53 imes 107\ ft \cdot lbf/lbm$. The fuel costs $3.50 per gallon. Use standard air properties. Be careful with unit conversions.

Which of the following is true for perfect competition but not true for monopolistic competition and monopoly?

A) MC = MR

B) P = MC

C) Positive long-run profits

D) P = MC and positive long-run profits

Compared to the short-run industry supply curve, the long-run industry supply curve will be more a. elastic. b. inelastic. c. steeply sloped. d. profitable. e. accurate.

A student makes the following comment: I can understand why a perfectly competitive firm will not earn a profit in the long run because a perfectly competitive firm charges a price equal to marginal cost. But a monopolistically competitive firm can charge a price greater than marginal cost, so why can't it continue to earn a profit in the long run? How would you answer this question? a. Is it possible to say whether this firm is a perfectly competitive firm or a monopolistically competitive firm? If so, explain how you are able to make this determination. b. Does the graph show a short-run equilibrium or a long-run equilibrium? Briefly explain. c. What quantity on the graph represents long-run equilibrium if the firm is perfectly competitive?

Assume that the egg industry is perfectly competitive and is in long-run equilibrium with a perfectly elastic long-run industry supply curve. Health concerns about cholesterol then lead to a decrease in demand. Construct a figure similar to Figure 60.3, showing the short-run behavior of the industry and how long-run equilibrium is reestablished.