Question :
11) When firms in a perfectly competitive market incur economic : 1238768
11) When firms in a perfectly competitive market incur economic losses, exit by some firms means the market supply will
A) increase.
B) decrease.
C) not change.
D) become vertical.
E) become the same as the individual producers’ supplies.
12) To eliminate losses in a perfectly competitive market, firms exit the industry. This exit results in
A) an increase in market supply.
B) a decrease in market supply.
C) an increase in market demand.
D) a decrease in market demand.
E) a decrease in both the market supply and the market demand.
13) Suppose a perfectly competitive market is in short-run equilibrium. Firms that are incurring a ________ economic loss ________.
A) persistent; increase their output to increase their profit
B) temporary; exit the industry
C) temporary; decrease their production but definitely stay open
D) persistent; exit the industry and shift the market supply curve leftward
E) persistent; exit the industry and shift the market supply curve rightward
14) In the long run, existing firms exit a perfectly competitive market
A) only if economic profits are zero.
B) if they make a positive economic profit.
C) if normal profits are greater than zero.
D) only if they incur an economic loss.
E) if they either make a normal profit or if they incur an economic loss.
15) In the long run, perfectly competitive firms will exit the market if the price is
A) higher than average variable cost.
B) equal to average total cost.
C) less than average total cost.
D) equal to average fixed cost.
E) equal to marginal revenue.
16) A perfectly competitive market is in equilibrium and then demand decreases. The decrease in demand means the market price will ________ and eventually there will be ________.
A) rise; entry by new firms
B) fall; exit by existing firms
C) fall; entry by new firms
D) rise; exit by existing firms
E) fall; neither entry nor exit because the market is perfectly competitive
17) Catfish farming is a perfectly competitive industry. Catfish farmers suffered tremendous economic losses in the late 2000s. As a result,
A) some new catfish farmers entered the market.
B) some catfish farmers exited the market.
C) no catfish farmers entered or exited this market.
D) the supply of catfish increased in 2010.
E) new demanders entered the market after some firms had exited.
18) Keith is a perfectly competitive carnation grower. The market price is $2 per dozen carnations. Keith’s average total cost to grow carnations is $2.50 per dozen. In the long run, Keith will
A) raise his price to more than $2.50 per dozen carnations.
B) raise his price to $2.50 per dozen carnations.
C) exit the industry if the price and his costs do not change.
D) incur an economic loss.
E) continue to make an economic profit.
19) If concerns about mad-cow disease impose economic losses on the perfectly competitive cattle ranchers, exit by the ranchers combined with no further changes in the demand for beef will force the price of beef to
A) decrease.
B) not change.
C) increase.
D) fluctuate, with the trend being lower prices.
E) probably change, but more information about the market supply of beef is needed to answer the question.
20) Suppose a perfectly competitive market is in a short-run equilibrium. If some firms exit the market, the profit of the remaining firms ________; if some firms enter the market, the profit of each existing firm ________.
A) decreases; is unchanged
B) increases; decreases
C) increases; is unchanged
D) is unchanged; is unchanged
E) decreases; increases
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john michaelll
