Question

answers plz

13)

At a firm's profit-maximizing level of output, its price is $200 and its short-run average total cost is $225. The firm

Group of answer choices

should shut down if its short-run average fixed cost is less than $25.

has a profit of $25 per unit of output.

has a loss of $100 per unit of output.

should shut down if its short-run average variable cost exceeds $25.

14) In long-run equilibrium under perfect competition,

Group of answer choices

individual firms will tend to increase their outputs.

only a very few firms will be earning economic profits.

the demand curves facing individual firms will fall to the level of minimum AC.

the firm and the industry will have the same cost curves.

15) If government forced a firm to charge a price equal to marginal cost in a situation where there are scale economies,

Group of answer choices

marginal cost would exceed average cost.

new firms would enter the industry.

positive economic profit would grow even larger.

the firm would be forced to go bankrupt.

16) Which of the following most resembles a perfectly competitive market?

Group of answer choices

the stock market

the steel industry

the publishing industry

the new car market

17) A firm will shut down in the short run if

Group of answer choices

TR TC > TFC.

TC - TR > TFC.

TFC TVC > TR.

TR - TC > TFC.

19)In a market with perfectly competitive firms, the market demand curve is usually ____ and the demand curve facing each individual firm ____.

Group of answer choices

horizontal; downward sloping

upward sloping; horizontal

downward sloping; horizontal

downward sloping; downward sloping

21)Which of the following statements is not true in a perfectly competitive industry in long-run equilibrium?

Group of answer choices

There is no entry or exit from the industry.

Every firm produces at an output level at which MC = LRAC.

A profit-maximizing firm may produce any output level at which P < LRAC.

No firm earns an economic profit.

22) We expect the demand curve in the perfectly competitive industry to be

Group of answer choices

perfectly elastic.

negatively sloped.

horizontal.

vertical.

Answer 1

1. Option(D) should shut down if its short-run average variable cost exceeds $25. is correct

This option is correct because in this case the price charged is $200 and the total cost is $225 which means that $25 is variable cost. So if the cost exceed $25 than it will shutdown the operations.

2. Option(C) the demand curves facing individual firms will fall to the level of minimum AC is correct

This option is correct because in perfect competition, the firms donot earn economic profit and the output is also constant. So, the long run AC and MC are equal in long run which means that the demand curve facing individual firms fall to minimum AC.

3. Option(B) new firms would enter the industry. is correct

This option is correct because the industry is experiencing economies of scale which means that new firm will enter in market until there is no economic profit in the industry.

4. Option(B)the steel industry is correct

This option is correct because in competitive market, the good produced is homogenous. The Steel industry is one of the best example of perfect competitive market.

5. Option(C) TFC TVC > TR. is correct

This option is correct because a perfect competitive market shuts down when it is not able to cover its fixed and variable costs.

6. Option(C) downward sloping; horizontal is correct

This option is correct because the demand curve of the whole market is downward sloping in competitive market whereas it is horizontal for a firm because it is a price taker.

7. Option(D) No firm earns an economic profit. is correct

This option is correct because in long run, all the firms of competitive market earn zero economic profit.

8. Option(C) horizontal. is correct

This option is correct because the demand curve of a firm in the market is horizontal and parallel to x-axis. The firm’s demand curve is equal to MC in long run.