Under perfect competition, in long-run equilibrium, Blank. a.each firm will produce and supply...
Question:
Under perfect competition, in long-run equilibrium, _____.
a.each firm will produce and supply an equal amount of goods.
b.firms will produce at the level of output where marginal revenue exceeds the marginal cost by the greatest dollar amount.
c.firms will earn economic profits because of the existence of barriers to entry.
d.the demand curve facing individual firms will fall to the level tangent to the minimum average total cost curve.
e.price will equal the minimum average fixed cost.
Perfect Competition:
Perfect competition refers to the market structure in which all suppliers and buyers deal in similar products, enjoy no market power and there are no restrictions on the entry and exit of the firms.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe correct option is:
d. the demand curve facing individual firms will fall to the level tangent to the minimum average total cost curve.
All the...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Perfect Competition: Definition, Characteristics & Examples
from
Chapter 3 / Lesson 62
275K
Learn the definition, characteristics, and benefits of perfect competition. Review real-life examples of perfect competition between different companies.
Related to this Question
- Under perfect competition, at the profit-maximizing level of output: a. the marginal revenue curve is downward sloping. b. price is equal to marginal revenue. c. marginal revenue is equal to zero. d. price is greater than marginal revenue. e. the average
- For a competitive firm, the level of output that maximizes profits is where marginal revenue {Blank} marginal cost, and for a monopolist, it is where marginal revenue {Blank} marginal cost. A. is equal to; is greater than B. is greater than; is equal to C
- Under perfect competition, which of the following are the same (equal) at all levels of output? a. total cost and total revenue b. market price and marginal revenue c. market price and marginal cost d. marginal cost and marginal revenue
- If a firm is a perfect competitor, then: A. its marginal cost will exceed marginal revenue at the optimal level of output. B. the demand curve for its product is perfectly elastic. C. it can independently set the price of the product it sells without re
- Under perfect competition, which of the following are the same (equal) at all levels of output? a. Price and marginal cost b. Price and marginal revenue c. Marginal cost and marginal revenue d. All of the above answers are correct
- If a profit-maximizing firm in perfect competition is earning economic profit, it must be producing at a level of output where: A) price is greater than marginal cost. B) price is greater than marginal revenue. C) marginal cost is greater than marginal
- When a firm in perfect competition is maximizing profits and produces that level of output where price, marginal revenue, marginal cost, average total cost, long-run marginal cost, and long run average total cost are all equal, the firm _____. a. earns a
- To determine its output quantity, the firm in perfect competition sets: a. marginal cost equal to marginal revenue. b. marginal cost equal to average total cost. c. price equal to marginal cost. d
- A monopolistically competitive firm is currently producing 20 units of output. At this level of output the firm is charging a price equal to $20, has marginal revenue equal to $12, has marginal cost equal to $12, and has average total cost equal to $18. F
- The marginal cost of a firm under perfect competition is given by the equation MC = 2QF - 20. The market price is $43 per unit. Determine the firm's profit-maximizing level of output.
- In the model of perfect competition, firms maximize profits by producing where: a) the difference between marginal revenue and marginal cost is maximized. b) marginal revenue equals price. c) the difference between price and marginal cost is maximized. d)
- A perfectly competitive firm maximizes profit when: a. its marginal cost is minimum b. its marginal cost is greater than its marginal revenue c. its marginal revenue is equal to its marginal cost d. its marginal cost is negative e. its marginal revenue is
- In perfect competition, the marginal revenue of an individual firm A. is zero. B. is positive but less than the price of the product. C. equals the price of the product. D. exceeds the price of the product.
- For a monopolistically competitive firm in long-run equilibrium: a. price will equal marginal cost. b. price will equal average total cost. c. marginal revenue will exceed marginal cost. d. economic p
- 1. If a perfectly competitive firm is producing a quantity at which marginal cost equals marginal revenue, profit: a. Is maximized. b. Can be increased by increasing production. c. Can be increased by
- A perfectly competitive firm will maximize profit when the quantity produced is such that the: A) price exceeds the firm's marginal cost by as much as possible. B) firm's marginal revenue is equal to the price. C) firm's marginal revenue is equal to its m
- Consider a situation in which there is perfect competition in both the input and output markets. The firm will hire that input level which equates: a. marginal revenue product with marginal factor cost b. marginal physical product with marginal factor cos
- When a profit-maximizing firm in a monopolistically competitive market is producing the long-run equilibrium quantity: a. its marginal revenue will exceed its marginal cost. b. its average revenue will equal its marginal cost. c. it will be earning positi
- If a firm's marginal revenue exceeds its marginal cost, maximum-profit rules require that the firm: a. increase its output in both perfect and imperfect competition. b. increase its output in perfect but not necessarily in imperfect competition. c. increa
- In perfect competition, a firm maximizes its economic profit if it produces the output at which? A. market price equals marginal revenue B. economic profit equals zero in the short run C. marginal cost equals market price D. total revenue equals tota
- In monopolistic competition, the firm's optimal price is: A. equal to marginal revenue B. equal to marginal cost C. greater than marginal cost D. less than marginal cost
- To maximize profits, a perfectly competitive firm should produce at an output up to the point where: A. The difference between price and marginal cost is at its maximum B. Total cost equals total revenue. C. Price equals marginal cost. D. Total revenue eq
- In a perfectly competitive market, if price is greater than average total cost at the level of output where marginal cost equals marginal revenue: a) the firm must be in long-run equilibrium. b) the
- In order to maximize profits, a perfect competitor will produce the quantity of output A. where total revenue is maximized B. where total cost is minimized C. where marginal revenue equals marginal cost D. where marginal revenue exceeds marginal cost by t
- In perfect competition, marginal revenue always equals: a. total revenue b. price c. average cost d. marginal fixed cost
- A monopolistic competitor will maximize profits by producing the quantity of output where a) marginal revenue is equal to marginal cost. b) marginal revenue is maximized. c) total revenue is maximized. d) price is maximized.
- Does marginal revenue exceeds marginal cost, or marginal cost exceed marginal revenue, or total cost exceed total revenue, or none of these if a competitive firm is currently producing a level of outp
- For a firm in perfect competition in the product market, the marginal revenue product of labor falls as more workers are hired because of: a. diminishing marginal cost of production. b. falling output price as more of the good is sold. c. the falling o
- A perfectly competitive firm's profit per unit of output can be determined by the amount by which the demand curve facing the firm lies above the marginal-cost curve at the profit-maximizing output level. A.True B.False
- If a firm is a perfect competitive firm: _____. a. its marginal revenue is equal to market price. b. it should produce where price is equal to marginal cost. c. it is a price taker. d. all of the above.
- If the firm is producing at a quantity of output where marginal revenue exceeds marginal cost, then _. Choose all that apply. - the excess profit would attract additional competition - each marginal
- In perfect competition, the marginal revenue of an individual firm: a) equals the price of the product b) is positive but less than the price of the product c) exceeds the price of the product d) is zero
- 1. For a firm operating in a perfectly competitive market, profit maximization is attained at that level of output where: A. the price of the product is equal to the marginal cost of producing the las
- Which of the following are the same at all levels of output under perfect competition? a. Marginal cost and marginal revenue. b. Price and marginal revenue. c. Price and marginal cost. d. All of the answers above are correct.
- Long-run equilibrium for firms in monopolistically competitive industries is similar to that for firms in perfect competition in that: a. Price equals the minimum possible average total cost, b. Price equals marginal cost, c. Marginal revenue equals avera
- Under perfect competition, price is equal to: A. marginal revenue B. total revenue divided by output C. average revenue D. All of the choices are equal to price under perfect competition.
- In a perfectly competitive market: a. price is always equal to marginal revenue. b. price is always greater than marginal revenue. c. price is always greater than marginal cost. d. price is always equal to marginal cost.
- If a perfectly competitive firm is producing at an output at which marginal cost exceeds marginal revenue: A. price will be at the profit-maximizing level. B. the firm should reduce production. C. sales will be at the profit-maximizing level. D. the fi
- For the monopolistic competitor, which is incorrect? a. The profit maximizing rate of output is where the marginal cost curve intersects the marginal revenue curve. b. The marginal revenue curve is downward sloping and lies below the demand curve. c. Beca
- 1.) A profit maximizing firm will shutdown and produce zero output under perfect competition if: A.Marginal revenue is less than marginal cost B.Price is higher than average variable cost but less t
- Let a firm be in long run competitive equilibrium. The market price will be equal to A. The marginal revenue. B. The marginal cost. C. The average total cost. D. All of the above.
- For a monopolistically competitive firm, at the profit-maximizing quantity of output, a. price exceeds marginal cost. b. marginal revenue exceeds marginal cost. c. marginal cost exceeds average rev
- In monopolistic competition, a firm should increase output whenever: A. marginal revenue is below marginal cost. B. price is above marginal cost. C. price is below marginal revenue. D. None of the above.
- Which of the following are same at all levels of output under perfect competition? a. Marginal cost and marginal revenue. b. Price and marginal revenue. c. Price and marginal cost. d. All of the answers above are correct.
- Compare the efficiency of monopolistic competition and perfect competition in long run equilibrium. a. Monopolistically competitive firms produce where marginal revenue equals marginal cost and are th
- If the production of a good yields a negative externality, then the social-cost curve lies the supply curve, and the socially optimal quantity is than the equilibrium quantity. a. above, greater b. above, less c. below, greater d. below, less
- If the production of a good yields a negative externality, then the social-cost curve lies _ the supply curve, and the socially optimal quantity is _ than the equilibrium quantity. a. above, greater b. above, less c. below, greater d. below,
- In a monopolistically competitive industry, the long-run equilibrium output corresponds to the tangency of the firm's LRAC and its demand curve. This output is also where marginal revenue equals marginal cost because A) firms will have negative profits at
- In long-run equilibrium, for each identical firm in a perfectly competitive industry: a. marginal cost = price b. marginal cost = average total cost c. profit = 0 d. all of the above are true
- For a perfectly competitive firm, at profit maximization a) production must occur where average cost is minimized. b) market price exceeds marginal cost. c) marginal revenue equals marginal cost.
- For a monopolistically competitive firm, (a) price equals marginal revenue at all levels of output (b) price is less than marginal revenue at all levels of output (c) price is greater than marginal revenue at all levels of output (d) the demand curve is p
- Firms in perfect competition will most likely increase their total output until: a. Marginal cost equals price. b. Marginal revenue equals average total cost. c. Total revenue equals price.
- At the level of output where marginal revenue equals marginal cost, assume that the price of a competitive firm's product is between the firm's average total cost curve and its average variable cost curve. In this case, the firm would: a) decrease output
- If the firm is producing at a quantity of output where marginal cost exceeds marginal revenue, then Blank. a. the firm should reduce production. b. each marginal unit adds profit by bringing in more revenue than its cost. c. the firms perceived demand w
- Profit maximization occurs when: a. a firm expands output until marginal revenue is exceeded by marginal cost. b. a firm expands output until marginal revenue is equal to marginal cost. c. the price in the market is equal to the firm's marginal revenue. d
- When a profit-maximizing firm in a monopolistically competitive market is in a long-run equilibrium: A) marginal cost is falling B) price exceeds marginal costs C) demand curve will be perfectly ela
- A profit-maximizing firm will hire workers until: a. marginal product per dollar is the same for all inputs b. marginal product is the same for all inputs c. the marginal product for all inputs is equal to wage d. the marginal product per dollar for all i
- The perfectly competitive firm will seek to produce the level of output for which: A. average total cost is at a minimum. B. average fixed cost is at a minimum. C. marginal cost equals marginal revenue. D. average variable cost is at a minimum.
- A perfect competitor should maximize profits: a. at the output level where total revenue less than total costs b. at an output level where the marginal product of labor less than 0 c. at the output le
- If, at the output where marginal cost equals marginal revenue, both a pure competitor's and a monopolist's marginal revenue is $5.00: A) both sellers' profit-maximizing price will be $5.00. B) both sellers' profit-maximizing price will be greater than $
- What output level will a monopolistically competitive firm produce at the maximum revenue or minimum cost? A. The point where price = average total cost. B. The point where marginal revenue = marginal cost. C. The point where demand = marginal revenue. D.
- A monopolistically competitive firm will increase its production if; a. marginal revenue is greater than marginal cost. b. marginal revenue is greater than average total cost. c. price is greater than marginal cost. d. price is greater than average tot
- If, at the output where marginal cost equals marginal revenue, both a pure competitor's and a monopolist's marginal revenue is $5.00: A) both sellers' profit-maximizing price will be $5.00. B)) both s
- Given a perfectly competitive market structure, suppose a firm's total revenue equals $210 and its output is 70 units when the firm's marginal-cost curve intersects its marginal-revenue curve. Since the firm is a profit-maximizing firm, what is marginal r
- For a monopolistic competitive firm: a) price is less than marginal revenue at all levels of output. b) price is greater than marginal revenue at all levels of output except for the first unit. c) price equals marginal revenue at all levels of output. d)
- When marginal cost equals price in a perfectly competitive product market at long run equilibrium, which of the following is not correct? A. There is a socially optimal or efficient output and price. B. Other product markets are inefficient by contrast. C
- If a profit-maximizing firm in a perfectly competitive market is making an economic profit, then it must be producing a level of output where: A) marginal cost is greater than average total cost. B) marginal cost is greater than marginal revenue. C) price
- The profit-maximizing level of production A. is not measurable for a perfectly competitive firm. B. is where the difference between marginal revenue and marginal cost is maximized. C. ignores the relation of total revenues and total costs. D. is the quant
- In order to maximize total revenue, a monopolist will: a. charge the highest price any consumer is willing to pay for that good. b. produce the output level at which marginal revenue equals marginal cost. c. produce the output level at which marginal reve
- When price is greater than average variable cost but less than average total cost at the profit-maximizing level of output, a firm should _____. a. continue to produce the level of output at which marginal revenue equals marginal cost b. shutdown to minim
- Short run supply curve for a perfectly competitive firm is marginal cost curve at and over the A. Shutdown point B. Cost cut profit point C. Marginal revenue point D. Elasticity point
- The level of output where marginal revenue equals marginal cost is: Quantity of output, Q Total revenue Total Cost 0 1 30 1 100 50 2 200 100 3 300 180 4 400 280 5 500 520 a. 2. b. 3. c. 5. d. 4.
- In pure competition: a) the optimal price-output solution occurs at the point where marginal revenue is equal to price. b) a firm's demand curve is represented by a horizontal line. c) a firm is a price-taker since the products of every producer are perf
- When a perfectly competitive firm seeking to max profits produces its current level of output its marginal revenue is $2 and its marginal cost is $3. Therefore: a. the firm should produce less b. th
- For a perfectly competitive firm, the marginal revenue is always A. below the firm's demand curve. B. equal to the market price. C. equal to marginal cost. D. declining.
- If the (profit-maximizing) level of output that a monopolist produces is such that marginal revenue, marginal cost, and average total cost are equal at that level of output, then economic profits must
- In order to maximize profit, a firm that produces two goods that are related in consumption should choose the levels of output at which: a. total marginal revenue equals total marginal cost b. total marginal revenue equals the marginal cost of each good c
- In the short run in perfect competition, a firm will shut down when: a. marginal revenue equals marginal cost. b. price is below average total cost. c. price is below average variable cost. d. economic profit is zero.
- If a competitive firm currently producing a level of output at which marginal cost exceeds marginal revenue, then Monopoly firms have what?
- If a firm has market power and marginal cost is constant relative to perfect competition: consumer surplus is lower, producer surplus is lower, and total surplus is lower. consumer surplus is lower, p
- The profit of a firm is maximized when: a. marginal revenue is greater than marginal cost b. marginal cost is minimum c. marginal revenue is equal to marginal cost d. marginal revenue is less than marginal cost e. marginal revenue is maximum
- In the long-run equilibrium in a perfectly competitive market, each firm produces an output at which: a) Price equals marginal cost of production b) Average cost equals marginal revenue c) Marginal co
- A perfectly competitive firm should increase its level of production as long as a. total revenue is less than total cost. b. the total revenue curve is rising. c. marginal revenue is greater than marginal cost. d. the marginal revenue curve is rising.
- At the level of output where marginal revenue equals marginal cost, price is less than average total cost but greater than average variable cost. In this instance, a profit-maximizing firm should: a.
- If the marginal revenue product of an input exceeds the marginal factor cost of the input, the firm A - should hire less of the input. B - should increase its use of the input. C - is not on its marginal cost curve. D - is maximizing profit.
- The profit-maximizing level of output for a perfectly competitive firm occurs where: a. marginal revenue equals price. b. marginal revenue equals marginal cost. c. total revenue equals total cost. d. average revenue equals average variable cost.
- Assume that for a perfectly competitive firm marginal revenue equals rising marginal cost at 100 units of output. At this output level, the firm's total fixed cost is $600 and its total variable cost is $400. If the price of the product is $10 per unit, t
- The long run equilibrium situation for a typical firm in a perfectly competitive market is: A. where marginal cost is equal to marginal revenue. B. where marginal revenue is equal to minimum average total cost. C. where there are no economic profit. D. al
- If a monopolistically competitive firm wants to maximize profits, it will increase production until a. marginal revenue is greater than average variable cost. b. marginal revenue = average total cost. c. marginal cost is greater than marginal revenue. d.
- 1. For a perfectly competitive firm, why is profit maximized at the level of output where marginal revenue equals marginal cost? 2. Define price discrimination. What three conditions must exist before a firm can use it successfully? 3. What is a cartel? D
- The competitive firm maximizes profit when it produces output up to the point where - price equals average variable cost. - marginal revenue equals total revenue. - marginal cost equals marginal revenue. - marginal revenue equals average revenue.
- A firm is in equilibrium when the marginal factor cost is: A. equal to the marginal revenue product. B. less than the price of the factor. C. equal to the average product. D. greater than the average product.
- In the dominant firm model of oligopoly, the dominant firm produces the quantity at which its marginal revenue equals A. the price of the product. B. zero. C. its marginal cost. D. its average total cost.
- If a monopolistic competitor is producing an output for which marginal revenue is $40 and marginal cost is $32, to maximize profits the firm should: A. decrease the level of output. B. keep the level of output constant. C. continue to make $8 per unit.
- If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then: a. average revenue exceeds marginal cost. b. the firm is earning a positive profit. c. decreasing output would increase the firm's profit
- 1. If price is above ATC for a perfect competitor A. the firm will earn economic profit B. the firm will maximize profits by producing where marginal revenue equals marginal cost C. Both of the above D. Neither of the above 2. If price is below ATC, but
- A monopolistic competitor is producing a level of output at which price is $200, marginal revenue is $100, average total cost is $210, marginal cost is $100, and average variable cost is $180. In order to maximize profit, the firm should: a) keep output t
Explore our homework questions and answers library
Browse
by subject