US12 L1 - US12 L1 1 In perfect competition, _. only fi rms...

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US12 L1 1 In perfect competition, ___________________. only firms know their competitors' prices there are many firms that sell similar products firms in the industry have advantages over firms that plan to enter the industry there are no restrictions on entry into the industry 2 In perfect competition, each firm ____________________________. faces a perfectly inelastic demand for its product can influence the price that it charges produces as much as it can is a price taker 3 Normal profit is ____________________________. equal to total revenue minus marginal cost equal to total revenue minus total cost equal to economic profit minus total cost included in the firm's total cost 4 A competitive firm's total revenue minus its total cost equals its __________. profit
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normal profit opportunity cost economic profit 5 In the short run, firms ___________ but in the long run, firms make ___________. make positive economic profits; positive economic profits can incur economic losses; positive economic profits make economic losses; positive economic profits can incur economic losses; zero economic profit 6 In perfect competition, the firm's marginal revenue ________________________. is less than the market price exceeds the price it charges equals its normal profit equals the market price 7 When a competitive firm produces the profit-maximizing output and it is at its shutdown point, the firm's ______________________. marginal revenue equals its average fixed cost total revenue is less than its total variable cost marginal cost is less than its average variable cost total revenue equals its total variable cost 8
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In a competitive industry when the plant size of each firm and the number of firms is given, the quantity supplied by all firms at each price is shown on the ________________________. the long-run industry supply curve the horizontal supply curve at the market price the vertical supply curve at the shutdown point the short-run industry supply curve 9 The presence of external economies _______ each firm's average costs as the industry output _______ and the presence of external diseconomies _______ each firm's average costs as industry output _______. lower; increases; raise; decreases lower; increases; raise; increases raise; increases; lower; increases lower; decreases; lower; increases 10 The _______ how the quantity supplied by an industry changes as the market price changes when firms have made all possible adjustments. short-run industry supply curve shows long-run industry supply curve shows individual firms' marginal cost curves show individual firms' supply curves show US12L2 1
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The smallest quantity of output at which long-run average cost is at a minimum is a firm's ________________. efficient output point
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This note was uploaded on 09/14/2011 for the course ECON 103 taught by Professor Gispy during the Spring '11 term at Prairie State College .

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US12 L1 - US12 L1 1 In perfect competition, _. only fi rms...

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