Question : 21.RefertoTable14-15.Whatisthelowestpriceatwhichthisfirmwouldoperateintheshortrun? a.$3. b.$4. c.$5. d.$6. Table14-15-a : 1261543

 

21.RefertoTable14-15.Whatisthelowestpriceatwhichthisfirmwouldoperateintheshortrun?

a.$3.

b.$4.

c.$5.

d.$6.

Table14-15-a

 

Quantity

TotalCost

0

$4

1

$10

2

$16

3

$21

4

$24

5

$35

6

$48

22.RefertoTable14-15-a.Whatisthelowestpriceatwhichthisfirmwouldoperateintheshortrun?

a.$5.

b.$6.

c.$7.

d.$8.

Figure14-12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23.RefertoFigure14-12.Ifthefigureinpanel(a)reflectsthelong-runequilibriumofaprofit-maximizingfirminacompetitivemarket,thefigureinpanel(b)mostlikelyreflects

a.perfectlyinelasticlong-runmarketsupply.

b.perfectlyelasticlong-runmarketsupply.

c.theentryoffirmsintotheindustrywhensomeresourcesusedinproductionareavailableonlyinlimitedquantities.

d.thefactthatzeroprofitscannotbesustainedinthelongrun.

24.Inacompetitivemarketwithidenticalfirms,

a.anincreaseindemandintheshortrunwillresultinanewpriceabovetheminimumofaveragetotalcost,allowingfirmstoearnapositiveeconomicprofitinboththeshortrunandthelongrun.

b.firmscannotearnpositiveeconomicprofitineithertheshortrunorlongrun.

c.firmscanearnpositiveeconomicprofitinthelongrunifthelong-runmarketsupplycurveisupwardsloping.

d.freeentryandexitintothemarketrequiresthatfirmsearnzeroeconomicprofitinthelongruneventhoughtheymaybeabletoearnpositiveeconomicprofitintheshortrun.

25.Whennewfirmsenteraperfectlycompetitivemarket,

a.economicprofitsofexistingfirmswillcontinuetobezero.

b.enteringfirmswillearnzeroeconomicprofituponentryintothemarket.

c.existingfirmsmayseetheircostsriseifmorefirmscompeteforlimitedresources.

d.priceswillriseasexistingfirmsraisepricestokeepnewfirmsoutofthemarket.

26.Supposeacompetitivemarketiscomprisedoffirmsthatfaceidenticalcostcurves.Thefirmsexperienceanincreaseindemandthatresultsinpositiveprofitsforthefirms.Whichofthefollowingeventsarethenmostlikelytooccur?

a.(i)and(ii)only

b.(i)and(iii)only

c.(ii)and(iii)only

d.(i),(ii)and(iii)

27.Intheshortrun,thereare500identicalfirmsinacompetitivemarket.Thefirmsdonotuseanyresourcesthatareavailableinlimitedquantities,andeachofthemhasthefollowingcoststructure:

 

Output

TotalCost

0

$0

1

$10

2

$12

3

$15

4

$24

5

$35

 

Thelong-runsupplycurveforthismarketis

a.positivelyslopedforallpricesabove$10.

b.horizontalatapriceof$5.

c.horizontalatapriceof$6.

d.horizontalatapriceof$7.

28.Intheshortrun,thereare500identicalfirmsinacompetitivemarket.Thefirmsdonotuseanyresourcesthatareavailableinlimitedquantities,andeachofthemhasthefollowingcoststructure:

 

Output

TotalCost

0

$0

1

$10

2

$12

3

$15

4

$24

5

$35

 

Whichofthefollowingisapointonthelong-runsupplycurve?

a.P=$10,Q=500.

b.P=$6,Q=1,000.

c.P=$5,Q=500.

d.P=$5,Q=1,500.

29.Intheshortrun,amarketconsistsof100identicalfirms.Themarketpriceis$8,andthetotalcosttoeachfirmofproducingvariouslevelsofoutputisgiveninthetablebelow.Whatwilltotalquantitysuppliedbeinthemarket?

 

Quantity

TotalCosts

0

$1

1

$7

2

$14

3

$22

4

$31

5

$41

 

a.200units

b.300units

c.400units

d.500units

30.Intheshortrun,amarketconsistsof100identicalfirms.Themarketpriceis$6,andthetotalcosttoeachfirmofproducingvariouslevelsofoutputisgiveninthetablebelow.Whatwilltotalquantitysuppliedbeinthemarket?

 

Quantity

TotalCosts

0

$1

1

$7

2

$12

3

$21

4

$32

5

$45

 

a.100units

b.200units

c.300units

d.400units