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Marknaden - priser, konsumenter och företag > modul 13 > Flashcards

modul 13 Flashcards

1
Q

Under what conditions will a perfectly competitive firm shut down in the long run?

A

When total revenue is less than total cost

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2
Q

How does a firm in a perfectly competitive market maximize economic profit?

A

A firm in a perfectly competitive market maximizes economic profit by producing at the level of output where marginal cost equals marginal revenue.

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3
Q

How can a firm’s supply curve be derived from its marginal cost curve?

A

A firm’s supply curve is derived from its marginal cost curve by taking the portion of the marginal cost curve above the average variable cost curve.

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4
Q

What is the slope of a total revenue curve for a perfectly competitive firm?

A

Marginal revenue

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5
Q

What is marginal revenue?

A

Marginal revenue is the increase in total revenue associated with a 1-unit increase in output.

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6
Q

What is the relationship between price and average variable cost?

A

Price is greater than average variable cost

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7
Q

What happens if price falls below average variable cost?

A

If price falls below average variable cost, the firm will shut down in the short run and reduce output to zero.

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8
Q

What is the profit-maximizing output determined by?

A

Average total cost

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9
Q

According to the marginal decision rule, a profit-maximizing firm should increase output until __.

A

marginal revenue equals marginal cost

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10
Q

What is the relationship between price and average variable cost for Madame LaFarge?

A

Price is always greater than average variable cost in the short run

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11
Q

The industry supply curve is derived from the supply curves of ______ firms.

A

individual

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12
Q

How is the firm’s supply curve derived?

A

From the firm’s marginal cost curve

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13
Q

What is the relationship between a perfectly competitive firm’s marginal revenue curve and the market price?

A

They are the same curve

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14
Q

What is economic profit?

A

Economic profit is the difference between total revenue and total cost.

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15
Q

What is the relationship between marginal revenue and the market price for a perfectly competitive firm?

A

Marginal revenue is equal to the market price

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16
Q

What determines the output level for a firm in a perfectly competitive market in the short run?

A

Marginal cost

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17
Q

Under what conditions will a perfectly competitive firm shut down in the long run?

A

When total revenue is less than total cost

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18
Q

How is the industry supply curve derived from the supply curves of individual firms?

A

The industry supply curve is derived by horizontally summing the supply curves of individual firms at each price level.

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19
Q

The slope of a total revenue curve measures the rate at which total revenue increases as ______ increases.

A

output

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20
Q

What determines the level of output in a perfectly competitive market in the short run?

A

Market price

21
Q

The firm’s supply curve is derived from the firm’s ______ cost curve.

A

marginal

22
Q

What is the relationship between the marginal revenue curve and the market price for a perfectly competitive firm?

A

The marginal revenue curve is a horizontal line at the market price

23
Q

What is the relationship between market price and total revenue for a perfectly competitive firm?

A

No relationship

24
Q

How does a firm’s supply curve relate to its marginal cost curve?

A

The supply curve is the same as the marginal cost curve

25
Q

The equilibrium price and industry output in a perfectly competitive market are determined by __ and supply.

A

demand

26
Q

What is the level of output that maximizes economic profit for an individual firm in a perfectly competitive market?

A

The level of output where total revenue is equal to total cost

27
Q

What determines a firm’s total revenue in a perfectly competitive market?

A

The firm’s output level

28
Q

What is the relationship between a perfectly competitive firm’s marginal revenue curve and its average revenue curve?

A

They are the same curve

29
Q

What is the slope of a total revenue curve for a perfectly competitive firm?

A

Marginal revenue

30
Q

A firm in a perfectly competitive market determines its output level in the __ run.

A

short

31
Q

What is the output level at which a firm maximizes economic profit or minimizes economic loss?

A

Intersection of marginal cost and marginal revenue curves

32
Q

What is economic profit per unit?

A

the difference between average total cost and price

33
Q

What is the relationship between price and average variable cost?

A

Price is greater than average variable cost

34
Q

To determine profit-maximizing output, the firm produces the output at which ______ equals marginal revenue.

A

marginal cost

35
Q

Economic profit per unit is the difference between ______ and price

A

ATC

36
Q

The firm maximizes profit by selecting an output at which ______ equals MC

A

MR

37
Q

Economic profit per unit is calculated by subtracting ______ from price.

A

marginal cost

38
Q

When will a firm shut down in the short run?

A

When price is below average variable cost

39
Q

How can the profit-maximizing output be determined using the marginal decision rule?

A

The profit-maximizing output can be determined by finding the point at which marginal revenue equals marginal cost.

40
Q

What is the concept of economic losses in the short run?

A

When price is less than average variable cost

41
Q

What is the relationship between marginal revenue and marginal cost in determining profit-maximizing output?

A

Profit-maximizing output is determined when marginal revenue equals marginal cost.

42
Q

How do you compute economic profit per unit?

A

Economic profit per unit is the difference between price and average total cost.

43
Q

What is the profit-maximizing output determined by?

A

Marginal cost

44
Q

According to the marginal decision rule, a profit-maximizing firm should increase output until __.

A

marginal revenue equals marginal cost

45
Q

What is the relationship between price and average variable cost in determining whether a firm should continue to produce or shut down in the short run?

A

Price must be above average variable cost

46
Q

What is the concept that represents the minimum level of average variable cost at which a firm should shut down?

A

Shutdown point

47
Q

How can a firm determine its profit-maximizing output using the marginal decision rule?

A

by finding the intersection of marginal revenue and marginal cost curves

48
Q

What determines the profit-maximizing output for Madame LaFarge?

A

The intersection of marginal cost and marginal revenue curves

Marknaden - priser, konsumenter och företag (14 decks)

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