State true or false. Perfectly competitive firm engages in a heavy advertising to increase its...
Question:
State true or false.
Perfectly competitive firm engages in a heavy advertising to increase its total revenue and profit.
Defining Advertising:
A firm incurs advertising expenditure when it wants to introduce its product to as many consumers as possible so as to increases their revenues implying higher profits. Advertising the product is done to make the consumers know more about the products features and its uses,
Answer and Explanation: 1
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View this answerThe statement is false.
Firms and buyers in a perfectly competitive market holds perfect information about the product offered in the market. Also,...
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Perfect Competition in Economics & Adam Smith's 'Invisible Hand'
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Chapter 7 / Lesson 2
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Perfect competition is perpetuated in regulated economic market systems, as the concept of the 'invisible hand,' devised by Adam Smith, keeps supply and demand lines in check. Learn more about these concepts, the five requirements for a perfectly competitive market, and market equilibrium, seeing applications of each through examples.
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- Perfectly competitive firm engages in a heavy advertising to increase its total revenue and profit. true or False? Explain.
- Total profit for an oligopolist is less than of a perfectly competitive firm. a. True b. False
- When a perfectly competitive firm makes a positive economic profit, its average revenue must be greater than its average total cost. A) True B) False
- If a perfectly competitive firm makes $200 in total revenue and its average revenue is $20, it implies that it produces 20 units. True or false?
- 1) True or False: Perfectly competitive firms will not advertise because there is no gain from selling additional units of the product. 2) True or False: Monopolistic competition is a very common indu
- True or false? If a perfectly competitive firm makes $200 in total revenue and its average revenue is $20, it implies that it produces 20 units.
- State true or false. Because only perfectly competitive firms are price takers, only competitive firms can earn profits.
- Answer true or false: If a perfectly competitive firm makes $200 in total revenue and its average revenue is $20, it implies that it produces 20 units.
- The profit of a perfectly competitive firm is maximized at a level of output where its marginal cost is rising. A) True B) False
- (36) A perfectly competitive firm will earn a positive economic profit so long as price is greater than average total cost at the profit-maximizing level of output. a. True b. False
- For the perfectly competitive firm, price equals marginal revenue. a. True b. False
- Monopolistic Competitive firm makes economic profit in the long-run. a. True b. False
- In perfect competition, no firm can earn a normal profit in the long run. a. True b. False
- The more that firms advertise, the closer they get to perfect competition. a. true b. false
- Monopolistic competition always results in an economic profit for the firm. a. True. b. False.
- If a perfectly competitive firm's price is equal to average total cost, the firm is earning a profit above its opportunity cost. True or false?
- True or false? In long-run equilibrium, every firm in a perfectly competitive industry earns an economic profit.
- True or False: The profit maximizing condition for both perfectly competitive firms and monopoly is to produce the quantity where MR=MC
- Monopolists earn excessive profits by increasing their quantity produced above the competitive market outcome. A) True B) False
- Answer true or false: A profit-maximizing firm in a monopolistic competitive market can earn positive, negative, or zero profits in the short run.
- For a perfectly competitive firm, price is identical to marginal revenue at every quantity. a. True b. False
- True or false? When a competitive firm earns zero profit, the market price is equal to the firm's both average and marginal costs.
- In a perfectly competitive market, a firms' marginal revenue decreases as its output increases. (i) True (ii) False
- True or False: Firms in a perfectly competitive market earn normal profit (or zero economic profit) in the long run. Explain.
- True or false? In a perfectly competitive market, each firm produces a differentiated product.
- For a perfectly competitive firm, zero economic profits implies that accounting profits equal implicit costs. True or false?
- In the long run, perfectly competitive firms typically do not earn any economic profits. True or False?
- State true or false. To maximize profit, a perfectly competitive firm should produce the level of output at which marginal cost equals price.
- For a firm in perfect competition, marginal revenue is equal to the market price. a. True. b. False.
- When a firm in a competitive market makes a positive economic profit, its business profit may be positive or negative. A) True B) False
- State True or False: Total profit for all firms in an oligopolistic market is greater than that of a monopolist.
- A profit-maximizing firm in a competitive market will increase production when average revenue exceeds marginal cost. a. True b. False
- In the long run, firms operating in perfect competition and monopolistic competition will tend to earn normal profits. Is this statement true or false? Explain.
- In monopolistic competition, there is no need for advertising. a. true b. false
- True or false? For a perfectly competitive firm, zero economic profits implies that accounting profits equal implicit costs.
- True or false? A perfect competitor can reap an economic profit in the short run.
- True or False: The long run level of profit is the same in each perfectly competitive industry.
- A firm that is maximizing profit must also be maximizing total revenue. (i) True (ii) False
- State true or false and justify your answer: Like a perfectly competitive firm, a monopolist maximizes profit by producing the level of output for which P = MC.
- State true or false and justify your answer: A perfectly competitive firm will continue to produce at a loss in the short run as long as total revenue covers the firm s fixed costs.
- True or false? In the long run, firms operating in perfect competition and monopolistic competition will tend to earn normal profits.
- Determine whether the following statement is true or false: In the long-run, level of profit is the same in each perfectly competitive industry.
- In perfect competition, firms earn economic profit in the long run. Is this statement true or false? Explain.
- The monopolistic Competitive firm is similar to the perfectly competitive firm in that they both break even in the long run. a. True b. False
- True or false? In a perfectly competitive market, price is equal to marginal revenue at every output level for the firm.
- True or false? There is no reason for a competitive firm to stay in business if it is making zero profits.
- To maximize profits, a firm should produce the level of output at which total revenue is maximized. True or false?
- Monopolistic competitors may earn positive economic profit in the short run, but earn zero economic profit in the long run. True or False?
- Monopolistic Competitive firm engages in product differentiation. a. True b. False
- Perfectly competitive firms will receive normal economic profit in the long run regardless of the decisions they make. True or False? Explain.
- A profit-maximizing firm, in perfect competition, restricts output below the level at which marginal revenue equals marginal cost. Is this true or false?
- State whether the following is true or false and explain why. In the long-run, purely competitive firms and monopolistically competitive firms earn zero economic profit (normal profit) and both will produce allocatively efficient outputs.
- Answer true or false: For a perfectly competitive firm, zero economic profits imply that accounting profits equal implicit costs.
- True or false? In the long run, a monopolistic competitor earns zero economic profit.
- True or false? When all firms pursue profits in competitive markets, none of them achieve profits.
- True or false? A profit-maximizing monopolist is a dominant firm.
- True or false? A firm earns a positive economic profit when the market price exceeds its marginal cost.
- True or false? When a perfectly competitive firm is producing at its profit-maximizing level of output, its MR is equal to price and its MC while it may or may not be making an economic profit.
- True or false? In the short run, it is possible for a perfectly competitive firm to make economic profits or economic losses.
- State true or false and justify your answer: If firms in a competitive industry are making an economic profit, new firms will enter and both price and profit will decrease.
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- The only way for a firm in a monopolistic competition to increase its sales is to lower its price. True or False? Why?
- In monopolistic competition, firms earn economic profit in the long run. Is this statement true or false? Explain.
- True or False: Under perfectly competitive conditions, marginal revenue is equal to the price at which a good is sold.
- True or false? Monopolistically competitive firms do not engage in advertising because products under this market structure are identical.
- True or false? Competitive firms must maximize profits to survive even though in long-run equilibrium profits are zero.
- True or false? Perfectly competitive firms engage in non-price competition.
- In the case of a monopoly, the firm maximizes profits at a point where the marginal revenue significantly exceeds the marginal cost. A. true B. false
- When a firm in a monopolistically competitive market earns zero economic profit, its product price must equal marginal cost. True False
- True or false? Competitive firms always earn zero profits because their marginal cost is equal to their marginal revenue at the optimal level of production.
- True or false? For a monopoly firm, marginal revenue and average revenue are positively sloped.
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- True or false? Economic profits can never be earned under monopolistic competition.
- A monopolist maximizes profit at the output rate where its total revenue equals total cost. a. True b. False
- If a firm maximizes profit, it must minimize the cost of producing the profit-maximizing output. Is this statement true or false? Explain your answer.
- If a firm is producing at the profit maximizing level of output, it must be making a profit. True or False?
- True or false? A monopoly firm will maximize profit by producing where demand is inelastic.
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- True or False: In the short-run, a perfectly competitive firm can earn normal profits or above normal profit but it cannot incur losses.
- A company with large gross margins will have large profits. (a) True (b) False.
- State true or false and justify your answer: If a seller increases the price of a good, it will always bring about an increase in the total revenue.
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- True or false? A firm can always increase its profit by increasing the price it charges.
- True or false? A profit-maximizing monopolist has a lot of market power.
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- If a monopolistic competitor is earning profits, then economists predict its costs will rise to reduce profits to zero. a. True. b. False.
- True or false? A perfectly competitive firm is profitable when the price exceeds the minimum average variable cost.
- In perfect competition, the larger firms will be able to charge a higher price than the smaller firms. a. True b. False
- In perfect competition, firms equate marginal revenue and marginal cost. Is this statement true or false? Explain.
- True or False. As long as profits are possible, more firms will enter the market, reducing the profits to each individual firm in a monopolistic competition.
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- True or false? A firm maximizes its profit by producing where the average total cost is at its minimum.
- In the long run perfect competition firms produce at the efficient scale while Monopolistically Competitive firms have excess capacity. a. True b. False
- In a perfectly competitive market, each firm produces the maximum amount it can produce and charges the lowest price possible in the long run. That is why we consider competitive markets efficient. A) True B) False
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