# Assume the market for cage - free eggs is perfectly...

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Chapter 4 / Exercise 4a
Exploring Macroeconomics
Sexton
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Principles of Microeconomics Spring 2018 Homework 8 Name Pratik Kacha MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Assume the market for cage - free eggs is perfectly competitive. All else equal, as farmers find it less profitable to produce and sell cage - free eggs in this market 1) B, A) the supply curve will shift to the right, the demand curve will shift to the left, and the equilibrium price will decrease. B)the supply curve will shift to the left, the demand curve will shift to the left, and the equilibrium price will increase. C) the supply curve will shift to the left and the equilibrium price will increase. D) the demand curve will shift to the left and the equilibrium price will decrease. C
2) A very large number of small sellers who sell identical products imply 2) A
Figure 12 - 4 Figure 12 - 4 shows the cost and demand curves for a profit - maximizing firm in a perfectly competitive market. 3) Refer to Figure 12 - 4. If the market price is \$30, the firm's profit - maximizing output level is
4) Refer to Figure 12 - 4. If the market price is \$30, should the firm represented in the diagram continue to stay in business?
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Chapter 4 / Exercise 4a
Exploring Macroeconomics
Sexton
Expert Verified
2 s, because it is covering part of its fixed cost. B)Yes, because it is making a profit. C) No, it should shut down because it is making a loss. D) No, it should shut down because it cannot cover its variable cost. 4) A
5) When a perfectly competitive firm finds that its market price is below its minimum average variable cost, it will sell A) the output where marginal revenue equals marginal cost. B)nothing at all; the firm shuts down. C) any positive output the entrepreneur decides upon because all of it can be sold. D) the output where average total cost equals price. 5) B
3 TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.