ECON 201 WVU EXAM 3
In the _________, the perfectly competitive firm will seek out
________________________ . - ANSWERS-short run; the quantity
of output where profits are highest
9. In the ________, the perfectly competitive firm will react to profits
by
__________________________ . - ANSWERS-long run; increasing
its production
Why are some producers forced to sell their products at the prevailing
market
price? - ANSWERS-they can increase output without affecting quality
In the ________, the perfectly competitive firm will react to losses by
__________________________ . - ANSWERS-long run; reducing
production or shutting down
Under perfect competition, any profit-maximizing producer faces a
market
price equal to its - ANSWERS-marginal cost
For a perfectly competitive firm, the marginal cost curve is identical
to the
, firm's ________________ . - ANSWERS-supply curve
Temperatures have persisted below freezing levels in Florida
throughout the
months of December and January. As a result, demand for electricity
sharply
increased and the price of electricity rose sharply. The price of coal
also rose. In
these circumstances, any resulting shifts in the supply curves for coal
miners and
electricity producers - ANSWERS-can also be interpreted as shifts of
their respective marginal cost curves.
If the price that a firm charges is higher than its ________________
cost of
production for that quantity produced, then the firm will earn profits. -
ANSWERS-average
What happens in a perfectly competitive industry when economic
profit is
greater than zero? - ANSWERS-new firms may enter the industry and
all of the above
If accounting profits for a firm are 20% of output, and the opportunity
cost of
financial capital is 8% of output, then what do the firm's economic
profits equal? - ANSWERS-12% of output
In the _________, the perfectly competitive firm will seek out
________________________ . - ANSWERS-short run; the quantity
of output where profits are highest
9. In the ________, the perfectly competitive firm will react to profits
by
__________________________ . - ANSWERS-long run; increasing
its production
Why are some producers forced to sell their products at the prevailing
market
price? - ANSWERS-they can increase output without affecting quality
In the ________, the perfectly competitive firm will react to losses by
__________________________ . - ANSWERS-long run; reducing
production or shutting down
Under perfect competition, any profit-maximizing producer faces a
market
price equal to its - ANSWERS-marginal cost
For a perfectly competitive firm, the marginal cost curve is identical
to the
, firm's ________________ . - ANSWERS-supply curve
Temperatures have persisted below freezing levels in Florida
throughout the
months of December and January. As a result, demand for electricity
sharply
increased and the price of electricity rose sharply. The price of coal
also rose. In
these circumstances, any resulting shifts in the supply curves for coal
miners and
electricity producers - ANSWERS-can also be interpreted as shifts of
their respective marginal cost curves.
If the price that a firm charges is higher than its ________________
cost of
production for that quantity produced, then the firm will earn profits. -
ANSWERS-average
What happens in a perfectly competitive industry when economic
profit is
greater than zero? - ANSWERS-new firms may enter the industry and
all of the above
If accounting profits for a firm are 20% of output, and the opportunity
cost of
financial capital is 8% of output, then what do the firm's economic
profits equal? - ANSWERS-12% of output
