· Question 10 Which of the following is not true for a purely competitive seller? MR...

· Question 10

Which of the following is not true for a purely competitive seller?

MR = MC at the profit maximizing output
A price taker
P = MC at the profit maximizing output
Inflexible price

· Question 11

In the short-run, a firm should:

Close down if the price is lower than average total cost for all output levels
Close down if total revenue is lower than total variable costs for all output levels
Close down if the normal profit is not realized at all output levels
Close down if total revenue is lower than total fixed costs at all output levels

· Question 12

The short-run supply curve of a competitive firm is its marginal cost curve

Above its average total cost curve
Above its total cost curve
Above its average fixed cost curve
Above its average variable cost curve

Expert Solution

Answer : 10) The answer is option a.

For purely competitive seller the profit maximizing output is that output level where P = MC. The seller in pure competition is price taker. So, the price is inflexible for sellers in pure competition. Only option a is not true for purely competitive seller. Therefore, option a is correct.

11) The answer is option b.

When total revenue does not cover the total variable cost then the firm should shutdown it's production in short run. Therefore, option b is correct.

12) The answer is option d.

For competitive firm the part of marginal cost curve which lies above the average variable cost curve is the short run supply curve. Therefore, option d is correct.

Rahul Sunny answered 2 years ago

Question. Which of the following is true in a purely competitive, price-taker market with low barriers...

Question. Which of the following is true in a purely competitive, price-taker market with low barriers to entry? Multiple Choice A. In the long run, firms will produce the quantity of output that minimizes per unit costs (ATC) of production. B. If economic profits are present in the short run, new firms will enter the industry, driving down prices until the industry returns to zero economic profits. C. Firms produce identical products. D. All of the above statements are true.

Which of the following explains why in the long run the purely competitive firm produces at...

Which of the following explains why in the long run the purely competitive firm produces at lowest possible cost? Select one: a. There are no advertising costs to add to production costs. b. The demand is equal to average revenue which equals marginal revenue curve is perfectly elastic and intersects the long run average cost curve at its lowest point,thus, the firm produces at full capacity. c. There are no economic profits. d. All of the above are correct.

For purely competitive industry, in long-run equilibrium, MR = P = minimum ATC = MC. Answer...

For purely competitive industry, in long-run equilibrium, MR = P = minimum ATC = MC. Answer the following and distinguish between productive efficiency and allocative efficiency in your answer. A. Of what significance for economic efficiency is the equality of P and minimum ATC? B. What is the importance of the equality of P and MC?

Which of the following is true? If the price elasticity of demand for an individual seller...

Which of the following is true? If the price elasticity of demand for an individual seller is h = 1.62, then the firm’s demand is inelastic. b. If the price elasticity of demand for an individual seller is h = 2.8, then the firm’s demand is unitary elastic. c. The price elasticity (in absolute value) of demand for a particular seller, or brand, is always smaller than the overall market elasticity of demand. d. The price elasticity (in absolute value)...

Which of the following statements is true? a. The seller of a futures contract is said...

Which of the following statements is true? a. The seller of a futures contract is said to be short futures. b. The buyer of a futures contract is said to be long futures. c. The seller of a futures contract is said to be long futures. d. The buyer of a futures contract is said to be short futures. e. Choices a and b

When in a purely competitive industry is in long run equilibrium, what equality is true? What...

When in a purely competitive industry is in long run equilibrium, what equality is true? What kind of efficiency (or efficiencies) is achieved in long run equilibrium and what equality represents the efficiency (or efficiencies)?

Which of the following is true of a shipment contract? The seller must put the goods...

Which of the following is true of a shipment contract? The seller must put the goods in the possession of the carrier. The seller must tender the delivery of goods to the buyer. The seller offers to turn the goods to the buyer, and the buyer offers to pay for them. The seller tenders the delivery of goods to the carrier, along with the document title.

Assume the following unit‑cost dataare for a purely competitive producer:TotalProductAveragefixedcost...

Assume the following unit‑cost data are for a purely competitive producer:TotalProductAveragefixedcostAveragevariablecostAveragetotalcostMarginalcost012345678910$60.0030.0020.0015.0012.0010.008.577.506.676.00$45.0042.5040.0037.5037.0037.5038.5740.6343.3346.50$105.0072.5060.0052.5049.0047.5047.1448.1350.0052.50$45403530354045556575At a product price of $41, will this firm produce in the short run? Why, or why not? If it does produce, what will be the profit‑maximizing or loss‑minimizing output? Explain. What economic profit or loss will the firm realize per unit of output.

1) Which of the following statements correctly describes a competitive market? A) sometimes, a single seller...

1) Which of the following statements correctly describes a competitive market? A) sometimes, a single seller has the ability to dictate the market price B) the market price is determined by the interaction of demand and supply C) the market price for the same good varies from seller to seller. D) buyers and sellers negotiate prices before making exchanges 2) The demand schedule for a commodity illustrates how the consumption of a commodity changes with changes in : A) supply...

Assume that the cost data in the following table are for a purely competitive producer: Total...

Assume that the cost data in the following table are for a purely competitive producer: Total Product Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 0 1 $60.00 $45.00 $105.00 $45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions:...

Question