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| The only requirement for a market to be perfectly competitive is for the market to have many buyers and sellers |
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| For a competitive firm, marginal revenue equals the price of the goods it sells |
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| If a competitive firm sells three times the amount of output, its total revenue also increases by a factor of three |
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| A firm maximzies profit when it produces output up to the point where marginal cost equals marginal revenue |
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| If marginal cost exceeds marginal revenue at a firm's current level of output, the firm can increase profit if i increases its level of output |
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| A competitive firm's short-run supply curve is the portion of its marginal cost curve that lies above its average-total-cost curve |
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| A competitive firm's long-run supply curve is the portion of its marginal-cost curve that lies above tis average-variable-cost curve |
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| In the short run, if the price a firm receives for a good is above its average variable costs but below its average total costs of production, the firm will temporarily shut |
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| n a competitive market, both buyers and sellers are price takers |
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| In the long run, if the price firms receive for their output is below their average total costs of production, some firms will exit the market. |
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| n the short run, the market supply curve for a good is the sum of the quantities supplied by each firm at each price |
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| The short-run market supply curve is more elastic than the long-run market supply curve |
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| In the long run, perfectly competitive firms earn small but positive economic proifts |
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| In the long run, if firms are identical and there is free entry and exit in the market, all firms in. the market operate at their efficient scale. |
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| If the price of a good rises above the minimum average total cost of production, positive economic profits will cause new firms to enter the market, which drives the price back down to the minimum average total cost of production. |
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| Which of the following is not a characteristic of a competitive market? |
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Definition
| Firms generate small but positive economic profits in the long run |
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| Which of the following markets would most closely satisfy the requirements for a competitive market? |
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| If a competitive firm doubles its output, its total revenue |
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Definition
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| For a competitive firm, marginal revenue i |
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Definition
| equal to the price of the good sold |
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Term
| The competitive firm maximizes profit when it produces output up to the point where |
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Definition
| marginal cost equal marginal revenue |
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Term
| If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost, the firm could increase profits if it |
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Definition
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| If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost, the firm could increase profits if it |
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Definition
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Term
| In the short run, the competitive firm's supply curve is the |
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Definition
| portion of the marginal-cost curve that lies above the average-variable-cost curve |
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Term
| In the long run, the competitive firm's supply curve is the |
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Definition
| portion of the marginal-cost curve that lies above the average-total-cost curve |
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Term
| A grocery store should close at night if the |
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Definition
| variable costs of staying open are greater than the total revenue due to staying open |
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| The long-run market supply curve |
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Definition
| is always more elastic than the short-run market supply curve |
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Term
| In the long run, some firms will exit the market if the price of the good offered for sale is less than |
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Definition
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Term
| If all firms in a market have identical cost structures and if inputs used in the production of the good in that market are readily available, then the long-run market supply curve for that good should be |
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Definition
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Term
| If an input necessary for production is in limited supply so that an expansion of the industry raises costs for all existing firms in the market, then the long-run market supply curve for a good could be |
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Definition
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Term
| If the long-run market supply curve for a good is perfectly elastic, an increase in the demand for that good will, in the long run, cause |
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Definition
| an increase in the number of firms in the market but no increase in the price of the good |
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Term
| In long-run equilibrium in a competitive market, firms are operating at |
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Definition
the minimum of their average-total-cost curves
the intersection of marginal cost and marginal revenue(Your Answer)
their efficient scale
zero economic profit |
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