exam 3 econ 101 caldwell Questions and Answers 100% Pass

exam 3 econ 101 caldwell

Questions and Answers 100%

Pass



profit maximization assumption - CORRECT ANSWER-we assume that firms

attempt to maximize profits

profits= - CORRECT ANSWER-TR-TC

P*Q-C(Q)

total revenue - CORRECT ANSWER-the amount of income received from all

units sold

total cost - CORRECT ANSWER-the total amount spent producing a given

quantity of output

marginal cost - CORRECT ANSWER-the additional cost incurred by producing

an additional unit of output

MC= - CORRECT ANSWER-ΔTC/ΔQ

MR= - CORRECT ANSWER-ΔTR/ΔQ

, marginal revenue - CORRECT ANSWER-the change in total revenue generated

by selling an additional unit of output

profit maximizing condition under perfect competition - CORRECT ANSWER-

firms should KEEP producing if MR>MC, and STOP producing where MR=MC

(same as monopoly)

perfectly competitive firm profitability - CORRECT ANSWER-firm is profitable if

TR>TC

firm breaks even if TR=TC

firm incurs a loss if TR<TC

perfect competition - CORRECT ANSWER-a market structure in which a large

number of firms all produce the same product and are each price takers

price taker - CORRECT ANSWER-a buyer or seller that is unable to affect the

market price; faces horizontal, perfectly elastic demand curve

perfectly competitive market - CORRECT ANSWER-a market in which all market

participants are price takers

perfectively competitive industry - CORRECT ANSWER-an industry in which all

producers are price takers

conditions for perfect competition - CORRECT ANSWER-1) many producers

with small market shares

2) consumers regard all products as equivalent

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