Perfect Competition-Part Two

In the long run, the competitive firm's supply curve is the

• entire marginal cost curve.

• upward­ sloping portion of the average total cost curve.

• portion of the marginal cost curve that lies above the average total cost curve.

• upward­ sloping portion of the average variable cost curve.

• portion of the marginal cost curve that lies above the average variable cost curve.

In the long­ run, some firms will exit the market if the price of the good offered for sale is less than

• marginal revenue.

• marginal cost.

• average total cost.

• average revenue.

In long­ run equilibrium in a competitive market, firms are operating at

• the minimum of their average­ total­ cost curves.

• their efficient scale.

• the intersection of marginal cost and marginal revenue.

• all of these answers are correct.

The lowest possible ATC point is the

• Efficiency scale

• Efficient scale

• Profit Maximization condition

• none

The image above shows a firm making

• Economic Profit

• Economic loss

• Breaking even

• Shutting down

A firm operating in a perfectly competitive market will shut down when price is below the minimum of a(n) ____________.

• marginal cost curve

• average total cost curve

• average fixed cost curve

• average variable cost curve

Assume a certain firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. What are this firm's profits?

• $-200

• $1,000

• $3,000

• $4,000