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Aristotle grows and sells wheat in a purely competitive market. His demand curve is:
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
Which of the following would be a feature of the Purely Competitive market structure?
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
MR = MC will maximize a firms profits:
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
In the short run, the firm's supply curve is:
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
When a firm produces less, they can reduce:
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
In pure competition, a profit maximizing firm will shut down when:
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
Let's assume that a profit maximizing firm has a marginal revenue of $10 and a marginal cost of $8.
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
Let's assume that the potato market is a purely competitive market. If demand shifts to the right for this market and increases the profits that potato farmers are making, in the long run we can expect:
In all types of industries and market structures.
Total revenue is less than total variable costs.
Products are standardized or homogeneous.
Profits to fall as more farmers start producing potatoes and increase market supply.
The firm should increase production and leave price unchanged.
Marginal cost above average variable cost.
Variable costs but not fixed costs.
Horizontal
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