chapter 12a - 12.1 Perfectly Competitive Markets 7) Perfect...

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12.1Perfectly Competitive Markets7) Perfect competition is characterized by all of the followingexceptA) heavy advertising by individual sellers.B) homogeneous products.C) sellers are price takers.D) a horizontal demand curve for individual sellers.Answer:A
8) A very large number of small sellers who sell identical products implyC
10) The price of a seller's product in perfect competition is determined byC
13) Suppose the equilibrium price in a perfectly competitive industry is $15 and a firm in the industry charges$21. Which of the following will happen?C
18) In perfect competitionA)the market demand curve and the individual's demand are identical.B) the market demand curve is perfectly inelastic while demand for an individual seller's product is perfectlyelastic.C) the market demand curve is perfectly elastic while demand for an individual seller's product is perfectlyinelastic.D) the market demand curve is downward sloping while demand for an individual seller's product is perfectlyelastic.Answer:D
12.2How a Firm Maximizes Profit in a Perfectly Competitive Market1) If the market price is $25, the average revenue of selling five units isC
2) If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
C
Table 12-1QuantityTotal Cost(dollars)Variable Cost(dollars)0$1,000$01001,3603602001,5605603001,9609604002,7601,7605004,0003,0006005,8004,800Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases.Assume that output can only be increased in batches of 100 units.4)Refer to Table 12-1.What is the fixed cost of production?C
7)Refer to Table 12-1.If the market price of each camera case is $8 and the firm maximizes profit, what is theamount of the firm's profit or loss?A) $0 (it breaks even)B) loss of $1,000C) profit of $440D) loss of $440Answer:C

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Term
Fall
Professor
Goss

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