Question

59. What type of industry is described by the term “perfect competition”? a. an industry in...


59. What type of industry is described by the term “perfect competition”?
a.
an industry in which numerous price-taking firms produce identical products
b.
an industry in which a few price-taking firms produce identical products
c.
an industry in which firms are price takers and compete for market share by varying the qualitative characteristics of products
d.
an industry in which numerous firms are price makers and produce identical products
60. Which of the following is most likely a price taker?
a.
an Alberta corn farmer
b.
a tax accountant
c.
a wedding photographer
d.
a car dealership in Charlottetown, PEI
FIGURE 8-5
The figure below shows the price, marginal cost, and average cost curves of a perfectly competitive firm.
63. Refer to Figure 8-5. How many units of output per day should the firm produce if it wants to maximize its profits (i.e., minimize its losses)?
a.
0
b.
30
c.
80
d.
100

Homework Answers

Answer #1
59)
a) an industry in which numerous price-taking firms produce identical products
60)
d) a car dealership in Charlottetown, PEI.
because there are several price-taking car dealerships across the country selling
identical cars.
63)
For a firm's supply under perfect competition, a firm will maximize profits when it produces at that level
where Marginal cost = price
MC = P
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