Perfect Competition

Front

A market with a large number of sellers

Back

might be a monopolistically competitive or a perfectly competitive market.

Front

A perfectly competitive firm

Back

sells a product that has perfect substitutes.

Front

In part, perfect competition arises if each firm produces a good or service identical to those produced by its many competitors.

Back

b only

Front

During the winter, theme parks in Orlando close earlier than in the summer. The reason the theme parks close early during the winter is because during that season the marginal revenue from staying open later is ________ the marginal cost.

Back

less than

Front

A perfectly competitive firm is earning an economic profit when total fixed costs increase. Assuming the firm does not shut down, in the short run the firm will

Back

continue producing the same quantity as before but will make less economic profit.

Front

The above figure shows a perfectly competitive firm. If the market price is $15, the firm

Back

is making an economic profit.

Front

If the market price is more than $20 per unit, the firm

Back

will stay open to produce and will make an economic profit.

Front

If the market price is $20 per unit, then the firm produces ________ units and makes an economic profit that is ________.

Back

30; zero

Front

When all firms in a perfectly competitive market are earning ________, we can state that the market is in a ________ equilibrium.

Back

a normal profit; long-run and an economic profit; short-run.

Front

What is the goal of a firm?

Back

to maximize profits