Checkpoint Qts. for week #6
6-1-1
According to professor park, three characteristics of a competitive
market are many small (buyers &) sellers, firms Sell identical
products, & there are no barriers to entry (& exit)
6-1-2
According to professor park, the consequence of the character-
istics of a competitive market in terms of what a firm can do
with the price is that the firm is going to be a price
taker (in other words no firm has an influence or control
over manket price
6-1-3
According to professor park, if a competive firm wants to
sell more then they should produce more product
6-1-4
According to professor park, the price always equals
the marginal revenue in a competitive market because
the price is fixed
According to professor park, what Short run means for
a potential newfirm is that time is not long enough for them
to establish their new business
6-2-2
According to professor park, at the level of quantity of output
that a firm decides to produce , two things are the same. These
two things are Price & marginal cost.
6-2-3
As a firm increases its output from 6 to 8, the total cost
rose from 16 to 22. The size of marginal cost is 6
6-2-4
If a competitive firm sells 6 units of output & the total revenue
is $48 then the marginal cost must be $8
6-2-5
If a competitive firm makes profits at the quantity of output
it produces & sells , the price must be greater than the average cost
6-3-1
If a competitive firm finds that the price is less than the average
cost in the short run at its best quantity of output, what the firm
Should do in its decision making process is consider average variable cost shutting
down
6-4-1
any
If an existing firm in a competitive market makes profits,
and
the kind of adjustment that will be made in the market in the
low manket Irice
in
long run is that new firms will enter the supply curve will shift to the
6-4-2
right
If an existing firm in a competitive Lin the market incurs loss, the kind of ad- Price rises
justment that will be made in the long manket run is that firms will exist & supply whve shifts
to
the
left
after having all passeng
boarded
