# Figure 812 The perfectly competitive firm&#39;s short-run...

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Chapter 8. Supply in a Competitive Market

1 .   ( Figure 8.12 ) The perfectly competitive firm 's short - run supply curve is represented by points :
D E , B , C , and
D . B , C , and H . A , B , C , and
D . B , C , and
D . .
2 .   In a perfectly competitive industry , the equilibrium price is \$ 56 and the minimum average total cost of the industry 's firms is \$ 40 . If this is a constant - cost industry , we can expect that in the long run , firms will _ _ ___ the market , shifting the industry 's short - run supply curve _____.
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3 .   ( Figure 8.10 ) Economic profit for this firm can be calculated as :
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4 .   With which of the following scenarios should a perfectly competitive firm shut down in the short run ?
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5 .   Suppose the market for relay switches is considered perfectly competitive and is in equilibrium at a price of \$ 5,000 per pallet of relay switches . Callahan Relay produces relay switches at an average total cost given by ATC = Q + 1,500,000 / Q and marginal cost given by MC = 2 Q , where Q measures pallets of relay switches . If Callahan Relay maximizes profit , how much profit will it earn ?
2. \$ 125,000 \$
2. 5 million \$ 88,000 \$
4. 75 million
Answer:  4.   75 million
6 .   ( Table 8.1 ) The level of output where marginal revenue equals marginal cost is : Quantity of Output , Q Total Revenue Total Cost 0 0 30 1 100 50 2 200 100 3 300 180 4 400 280 5 500 520 5 . 4 . 3 .
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7 .   To maximize profits , a firm should produce where :
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8 .   ( Figure 8.4 ) In a perfectly competitive market with 5,000 firms , the equilibrium price and quantity are \$ 0.70 and 3.0 million units . The demand curve facing a firm in this market is represented by :
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9 .   ( Figure 8.7 ) If the market price is \$ 6 , this perfectly competitive firm will earn
profits of :
\$ 27 .
\$ 18 .
\$ 54 .
\$ 78 .
Answers : 1. (Figure 8.12) The perfectly competitive firm's short-run supply curve is represented by points: E , B , C , and D B , C , and H A , B , C , and D B , C , and D . . . .
Score: 0 of 1 2. In a perfectly competitive industry, the equilibrium price is \$56 and the minimum average total cost of the industry's firms is \$40. If this is a constant-cost industry, we can expect that in the long run, firms will _____ the market, shifting the industry's short-run supply curve _____.
Score: 1 of 1 3. (Figure 8.10) Economic profit for this firm can be calculated as:
(160 × 80) – 30. 80 – 30. (160 – 130) × 80. Score: 1 of 1