Economics Chapter 14 review
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show | a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker.
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Definition of average revenue: | show 🗑
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show | the change in total revenue from an additional unit sold.
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Definition of sunk cost: | show 🗑
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show | TRUE
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show | TRUE
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show | FALSE
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Suppose a firm operating in a competitive market has the following cost curves: P1, P2, P3, P4. Firms will shut down in the short run if the market price | show 🗑
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show | FALSE
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show | some firms will exit from the market.
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Mrs. Smith operates a business in a competitive market. The current market price is $8.50. At her profit-maximizing level of production, the average variable cost is $8, and the average total cost is $8.25. Mrs. Smith should | show 🗑
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show | price takers.
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In the long run, when price is greater than average total cost, some firms in a competitive market will choose to enter the market. True or false? | show 🗑
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A firm is currently producing 100 units/day. The manager reports that producing the 100th unit costs the firm $5. The firm can sell the 100th unit for $5. The firm should continue to produce 100 units in order to maximize its profits. True or false? | show 🗑
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The Doris Dairy Farm sells milk to a dairy broker in Prairie du Chien, WI. Because the market for milk is generally considered to be competitive, the Doris Dairy Farm does not | show 🗑
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show | increase market supply and decrease market price.
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show | FALSE
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A firm operating in a competitive market will stay in business in the short run so long as the market price exceeds the firm's average total cost; otherwise, the firm will shut down. True or false? | show 🗑
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show | $4,000
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show | marginal revenue equals $4 and Total revenue equals $1,600
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A firm is currently producing 100 units/day. The manager reports that producing the 100th unit cost the firm $5. The firm can sell the 100th unit for $4.75. The firm should continue to produce 100 units in order to maximize its profits (or minimize loss) | show 🗑
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Demand curve is $4 each across the board, quantity can change. A firm operating in a competitive market maximizes total revenue by producing | show 🗑
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show | less than average variable cost.
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