Chapter 14: FIrms in competitive markets

Question 1

a perfectly competitive market has..

Answer 1

• many firms
  -identical products sold
  -no barriers to entry
  -is a price taker
  -the only decision a competitive firm needs to make is the output quantity
  -the economies benefits are the highest

Question 2

total revenue-total cost=

Answer 2

profit

Question 3

the revenue recieved of selling the next unit of output, the increase or change in TR is the

Answer 3

Marginal Revenue

Question 4

if TR is less than TC the firm

Answer 4

made a loss

Question 5

T or F: (p-ATC)x q is the equation for profit

Answer 5

True

Question 6

is p is equal to ATC profit is

Answer 6

zero

Question 7

if P is less that ATC profit is

Answer 7

negative

Question 8

If P is more than ATC profit is

Answer 8

positive

Question 9

how can we calculate operating cost

Answer 9

TR-C

Question 10

how can we determine the loss if a firm continued to operate

Answer 10

(TR-VC)-FC

Question 11

how to determine SR profit maximization

Answer 11

1. determine output quantity
   -if MR is greater than MC=produce
   -if MR=MC produce
   -if MC is less than MC=don’t produce shifts right unit
   2.profit

Question 12

the total market quantity supplied at different prices

Answer 12

market supply

Question 13

market supply calculation

Answer 13

the output quantity of a typical firm at different prices x number of firms

Question 14

market supply must do what of the following..

Answer 14

• be upwards
  -must increase with price

Question 15

number of firms decrease=market supply

Answer 15

decrease, supply curve shifts left

Question 16

number of firms increase= market supply

Answer 16

increase, supply curve shifts right

Question 17

SR market equilibrium helps us determine

Answer 17

market price