Exam #3 Flashcards
On graph A, the profits are maximized at Q* =____.
Q4
On graph A, the curve labeled M is the ____ curve and the curve labeled K is the ____ curve.
Total Revenue/Total Cost
_____ Producers the incentive to pursue their own selfish interests, engage in wealth creating activities and operate efficiently.
- Government regulations help give
- An oligopoly industry gives
- Competition gives
- a monopoly would give
Competition gives
As discussed in class, in Perfectly Competitive markets, if one firm decided to LOWER its P below the Market P,it would observe that it’s Quantity of sales would ____ & its TR would actually ____.
stay same/decrease
The ____ curve for the perfectly competitive firm is the vertical axis up until the minimum point on the AVC curve and then it coincides with the MC curve.
-Short Run S -Long Run D
-Long Run S
Short Run D
Short Run S
In a Constant Cost Perfectly Competitive Industry, the LR Supply Curve is ____ while in an increasing cost perfectly competitive industry, the LR supply curve is _____.
a horizontal line/a slightly upward sloping line
Figure 9.1.
If the Market P in this Perfectly Competitive Industry was $20, in the SR this firms profit maximizing Q* quantity would be ___.
50
Figure 9.1
Based on your answer to the previous question, in the SR, this firm would earn Average Profits (profits per unit) equal to $_____.
-70
Figure 9.1
If the Market P in this Perfectly Competitive Industry was $20, in the SR this firm would:
shut down
Figure 9.1.
If the Market price in this perfectly competitive industry was instead $80, in the SR this firm would earn Total Profits equal to around $____
1600
Figure 9.1
In this perfectly competitive industry, what would the market price need to be for an individual firm to feel indifferent between staying open and shutting down in the SR?
30
Figure 9.1
In this perfectly competitive industry, what would the market price need to be for this firm to be in Long Run Equilibrium?
60
Chart B
The schedule of TC for a chair manufacturing firm is presented in the table below. If the Market P of chairs is $100, which of the output level, Q* should this Perfectly Competitive firm produce in order to maximize profit?
40
Figure 9-2.
The Monopolistic Competitive Firm would Maximize his profits by producing a Quantity of Output, Q* equal to ____.
5
Figure 9-2
Based on your answer to the previous question, monopolistic competitive firm would charge a price equal to $___
100
Figure 9-2
Based on your answer to the previous questions, this monopolistic competitive firm would start to notice ___ in the Industry and its own D curve would ____.
entry/shift left
Figure 9-2
Using the information in the previous questions and in the graph above, in the LR, the equilibrium Price for this firm will be $____
60
Figure 9-3
Find the profit maximizing Q* of output for this monopolistic competitive firm. The maximum total Profits at this Q* equal $____
1800
Figure 9-3
If the following year this firm engages in ‘Price Discrimination’ it could charge $90 to some of its customers and $60 to the additional customers. In this case, its profits would ___ than if it charged only one price.
be higher
Figure 9-3
If the firm engaged in Price Discrimination, it should charge the higher price to the consumers with a more ___ demand and a lower price to the consumers with a more ____ demand for this product.
inelastic/elastic
