201-tutorial-9 - Econ 201 Tutorial #9 Date: Week of Mar....

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Econ 201 Tutorial #9 Date: Week of Mar. 19-25 Coverage: Chapter 9 Perfect Competition I. Multiple Choice Questions: 1. Assume that Farmer Dave produces lettuce and sells it in a perfectly competitive market. He is a price taker in the market, and by this we mean that: A) in order to sell additional amounts, Farmer Dave must lower his asking price. B) at the prevailing market price, Farmer Dave will sell an infinite amount. C) the demand curve faced by Farmer Dave for his product is downward-sloping. D) Farmer Dave can increase his output, within reason, sell the increase at the prevailing market price, and not affect market price. 2. Assuming that the competitive firm produces at all, it will be in the firm's best interest to expand output whenever: A) average total cost is greater than price. B) marginal cost is greater than price. C) price is greater than marginal cost. D) price is greater than average total cost. 3. If an industry is composed of two firms (temporarily) and they have short-run marginal cost curves of the form MC = 2 + 0.1Q and MC = 2 + 0.2Q respectively, how much will each supply if the going price is $6?
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201-tutorial-9 - Econ 201 Tutorial #9 Date: Week of Mar....

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