ECON 1010 Lecture Notes - Lecture 6: Marginal Revenue Productivity Theory Of Wages, Monopsony, Demand Curve
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12 Mar 2018
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What is the consequence of a firm in a competitive marketselling a homogenous product?
Ā | The firms capture some market power. |
Ā | The product sold by one firm is a perfect substitute for theproducts sold by other firms in the same industry. |
Ā | All the firms in the industry are the same size. |
Ā | The product sold by one firm is a perfect complement for theproducts sold by other firms in the industry. |
Ā | Firms in the industry can produce the same product with adifferent quantity of inputs. |
The accompanying table represents the quantity produced, thetotal revenue, and the total cost of a firm operating in aperfectly competitive market. Refer to this table to answer thefollowing questions.
Quantity | Total Revenue | Total Cost |
0 | $0 | $3 |
1 | $5 | $5 |
2 | $10 | $9 |
3 | $15 | $13 |
4 | $20 | $19 |
Ā | Ā | Ā |
Profits are maximized when producing _______ unit(s).
Ā | 4 |
Ā | 2 |
Ā | 3 |
Ā | 1 |
Ā | 0 (zero) |
If firms in a competitive market are making positive economicprofits, the long-run market supply curve
Ā | shifts upward. |
Ā | is above the point where the short-run market supply curve andthe demand curve intersect. |
Ā | and the short-run market supply curve and the demand curve allintersect at the same point. |
Ā | shifts downward. |
Ā | is below the point where the short-run market supply curve andthe demand curve intersect. |