2 3 5 caps lock E) unit elastic 9) Because perfectly competitive firms are price

Question

2 3 5 caps lock E) unit elastic 9) Because perfectly competitive firms are price takers, each firm faces a demand that is A) perfectly inelastic B) perfectly elastic C) highly inelastic but never is it perfectly inelastic. D) unit elastic. E) highly elastic but never is it perfectly elastic. 10) Elsie is a perfectly competitive dairy farmer. If the market price of milk falls to $1.20 a gallon from $1.40 a galion, Elsie A) can sell as much milk as she wants at $1.20 a gallon. B) will have to charge some customers $1.40 a gallon to stay in business. C) will produce the same amount of milk at both prices. D) can sell more at the lower price because the quantity demanded is higher at lower prices. E) will be able to charge her initial customers $1.40 a gallion. 11) For a perfectly competitive palm tree nursery in South Carolina, the total revenue curve is A) downward sloping. B) a horizontal line sloping E) undefined because the firm is perfectly competitive 12) For a perfectly competitive firm, marginal revenue is A) less than the price. B) greater than the price. C) equal to the price D) equal to the change in profit from selling one more unit. E) undefined because the firm's demand curve is horizontal. 13) For a perfectly competitive firm, the market price of a good is A) a given which the firm cannot change. B) determined by the firm in order to maximize its profit. C) equal to the firm's marginal revenue Answer A and answer B are correct E Answer A and answer C are correct 14) A perfectly competitive firm will maximize profits when the A) difference between total revenue and total cost is maximized. B) competition fails to make a profit and shuts down. C) firm can get a price higher than the market price D) firm is able to eam a normal profit E) difference between marginal revenue and marginal cost is maximized. 15) A firm maximizes its profit by producing the amount of output such that marginal revenue equals marginal cost. ) marginal revenue exceeds marginal cost by some amount. C) marginal revenue is maximized. D) marginal cost is minimized. E) marginal revenue exceeds marginal cost by the maximum amount possible.

Explanation / Answer

9. A perfectly competitive firm faces a demand curve that is horizontal and perfectly elastic. And cannot affect the price it receives for its output and it is unlikely to price its goods below market price.

9. ans: Perfectly elastic

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.