microeconomics ch.10

Mutual interdependence would tend to limit control over price in which market model?

oligopoly

An industry comprising four firms, each with about 25 percent of the total market for a product, is an example of

oligopoly

Output Marginal Revenue . Marginal Cost
0-------
1 $16$10
2 16 9
3 16 13
4 16 17
5 16 21
Refer to the data in the accompanying table. If the firm's minimum average variable cost is $10, at the profit-maximizing level of output, the firm's total revenue i$48.

In which of the following market structures is there clear-cut mutual interdependence with respect to price-output policies?

oligopoly

To maximize profits, the firm whose data is shown in the graph should produce the quantity

0 C

A purely competitive seller is

a "price taker.

The MR = MC rule applies

to firms in all types of industries.

Xavier produces and sells tomatoes in a purely competitive market. This implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the

unit price.

At P 2 in the accompanying diagram, this firm will

produce 44 units and earn only a normal profit.

Refer to the short-run data in the accompanying graph. The profit-maximizing output for this firm is

320 units.

An industry comprising a very large number of sellers producing a standardized product is known as

pure competition.

Refer to the diagram for a purely competitive producer. If product price is P 3,

economic profits will be zero.

Output Marginal Revenue . . . Marginal Cost
0-------
1 $16$10
2 16 9
3 16 13
4 16 17
5 16 21
Refer to the data in the accompanying table. If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be 3 Output total Revenue . . . . total Cost 0 0$50
1 $40$74
2 80 94
3 120 117
4 160 142
5 200 172
The table gives data for a purely competitive firm. The marginal revenue from the third unit of output is

40.

Which of the following is true under conditions of pure competition?

No single firm can influence the market price by changing its production level.

There would be some control over price within rather narrow limits in which market model?

monopolistic competition

Refer to the diagram for a purely competitive producer. The firm will produce at a loss at all prices

between P 2 and P 3.

Which of the following is not a basic characteristic of pure competition?

considerable nonprice competition

In the short run, a purely competitive firm that seeks to maximize profit will produce

where total revenue exceeds total cost by the maximum amount.