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ECON 323 Midterm: ECON 323 TAMU Exam2Fall 16a

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turquoisegnu128
31 Jan 2019
School
Texas A&M University
Department
Economics
Course
ECON 323
Professor
All

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Document Summary

The markets for many _______ come close to satisfying the conditions required for perfect competition. e. chemicals transportation products skill-intensive manufactures agricultural goods none of the above. In the short run, a firm that shuts down will earn economic profit of b. d. A perfectly competitive firm will earn zero economic profit if produces a quantity where p = mc = b. d. The industry supply curve will be b. d. P = c/n + (d/n)q none of the above i. A firm in a competitive industry has a total cost function of tc = If the firm faces a price of 20, what quantity should it sell? a. b. c. d. e. And what profit does the firm make at this price? a. b. c. d. e. And if the firm instead faces a price of 30, what quantity should it sell? a. b. c. d. e.

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Related Questions

45) A firm in a perfectly competitive industry is maximizing its economic profit by producing 500 units of output. At 500 units of output, which one of the following must be false? A) MR< ATC B) MC ATC D) MR > AVC E) MC< ATC

6. Power Printers Total Costs (per hour)

q TC

0 65

1 80

2 95

3 120

4 150

5 200

If the price of a printer is $50 in this perfectly competitive industry, what is the profit-maximizing rate of output?

7. Which of the following is NOT true in a perfectly competitive market?

a. There is free entry and exit into the industry.

b. Each firm produces a differentiated product.

c. Each firm faces a perfectly elastic demand curve.

d. Price is equal to marginal revenue at every output level for the firm.

8. A perfectly competitive firm should always continue to operate in the short run as long as:

a. P < ATC at the rate of output where MR = MC.

b. P < AVC at the rate of output where MR = MC.

c. MR > AVC at the rate of output where MR = MC.

d. MR > AFC at the rate of output where MR = MC.

9. A firm that makes zero economic profits:

a. Must eventually go bankrupt.

b. Should shut down.

c. Incurs a loss, but should not shut down.

d. Covers all its costs, including a provision for normal profit.

10. A monopoly firm is different from a competitive firm in that:

A. There are many substitutes for the monopolist’s product whereas the competitive firm’s demand curve is perfectly elastic.

B. The monopolist’s demand curve is perfectly inelastic, whereas the competitive firm’s demand curve is perfectly elastic.

C. The monopolist can influence the price in the market, whereas the competitive firm is a price taker.

D. All of the above

Suppose a monopolist faces a demand curve given by P=200-4Q. Additionally, she has marginal costs given by MC=100 and total costs given by TC=25+100Q.

a) calculate the formulas for the monopolists' FC, VC, ATC, AVC, and AFC.

b) calculate the profit - maximizing choice of output, price, and profits.


Also, how come, in a perfectly competitive market, the burden of a tax is shared in the short run? Also, why do consumers bear all of the burden of a tax in the long run?


thank you!