A firm has market power if it can

Group of answer choices

minimize costs.

influence the market price of the good it sells.

maximize profits.

hire as many workers as it needs at the prevailing wage rate.

A key characteristic of a competitive market is that

Group of answer choices

producers sell nearly identical products.

government antitrust laws regulate competition.

firms minimize total costs.

firms have price setting power.

Which of the following isnota characteristic of a competitive market?

Group of answer choices

Each firm chooses an output level that maximizes profits.

Buyers and sellers are price takers.

Entry is limited.

Each firm sells a virtually identical product.

Which of the following isnota characteristic of a competitive market?

Group of answer choices

The goods offered for sale are largely the same.

There are many buyers and sellers in the market.

Firms can freely enter or exit the market.

Firms can generate small but positive economic profits in the long run.

Who is a price taker in a competitive market?

Group of answer choices

sellers only

both buyers and sellers

buyers only

neither buyers nor sellers

When firms are said to be price takers, it implies that if a firm raises its price

Group of answer choices

competitors will also raise their prices.

firms in the industry will exercise market power.

buyers will go elsewhere.

buyers will pay the higher price in the short run.

Which of the following markets wouldmostclosely satisfy the requirements for a competitive market?

Group of answer choices

electricity

cable television

wheat

soft drinks

Free entry means that

Group of answer choices

the government pays any entry costs for individual firms.

a firm has no fixed costs in the short run.

a firm's marginal cost is zero.

no legal barriers prevent a firm from entering an industry.

Which of the following industries ismostlikely to exhibit the characteristics of free entry?

Group of answer choices

dairy farming

cable television

nuclear power

airport security

One of the defining characteristics of a perfectly competitive market is

Group of answer choices

many buyers and a small number of sellers.

a small number of sellers.

significant advertising by firms to promote their products.

a similar product.

In a competitive market, no single producer can influence the market price because

Group of answer choices

government intervention prevents firms from influencing price.

consumers have more influence over the market price than producers do.

many other sellers are offering a product that is essentially identical.

producers agree not to change the price.

When a competitive firm doubles the quantity of output it sells, its

Group of answer choices

total revenue doubles.

average revenue doubles.

marginal revenue doubles.

profits must increase.

For a firm in a perfectly competitive market, the price of the good is always

Group of answer choices

greater than average revenue.

equal to total revenue.

equal to the firm's efficient scale of output.

equal to marginal revenue.

If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then

Group of answer choices

total cost exceeds total revenue.

a one-unit decrease in output will increase the firm's profit.

total revenue exceeds total cost.

a one-unit increase in output will increase the firm's profit.

Sam sells soybeans to a broker in Chicago, Illinois. Because the market for soybeans is generally considered to be perfectly competitive, Sam maximizes his profit by choosing

Group of answer choices

to produce the quantity at which average variable cost is minimized.

the quantity at which the market price is equal to Sam's marginal cost of production (that is choosing the Q where P = MC).

to produce the quantity at which average fixed cost is minimized.

to sell at a price where marginal cost is equal to average total cost.

A grocery store shouldcloseat night if the

Group of answer choices

variable costs of staying open are less than the total revenue due to staying open.

total costs of staying open are less than the total revenue due to staying open.

total costs of staying open are greater than the total revenue due to staying open.

variable costs of staying open are greater than the total revenue due to staying open.

When a profit-maximizing firm is earning profits, those profits can be identified by

Group of answer choices

(P - ATC) X Q.

P X Q.

(MC - AVC) X Q.

(P- AVC) X Q.

When profit-maximizing firms in competitive markets are earning positive economic profits

Group of answer choices

market demand must exceed market supply at the market equilibrium price.

new firms will enter the market.

market supply must exceed market demand at the market equilibrium price.

the most inefficient firms will be encouraged to leave the market.

Entry into a market by new firms will increase the

Group of answer choices

marginal cost of producing the good.

supply of the good.

profits of existing firms.

price of the good.

When firms have an incentive to exit a competitive market because they are making losses, their exit will

Group of answer choices

reduce the losses of firms that remain in the market.

lower the market price.

necessarily raise the cost for the firms that remain the market.

shift the demand for the product to the left.

Timmy's Trophies operates in a perfectly competitive market. If the firm earns positive economic profit in the short run, then in the long run

Group of answer choices

the equilibrium price per trophy will rise.

some firms will exit from the market.

average total costs will fall.

more firms will enter the market.

In the long run, each firm in a competitive industry earns

Group of answer choices

positive economic profits.

positive, negative, or zero economic profits.

zero accounting profits

zero economic profits.

In the long run, each firm in a competitive industry produces a quantity where

Group of answer choices

average fixed cost is at its minimum.

marginal cost is at its minimum.

average variable cost is at its minimum.

average total cost is at its minimum.

When firms in a perfectly competitive industry face the same costs, in the long run they must be operating

Group of answer choices

under diseconomies of scale.

with small, but positive, levels of profit.

when price is equal to average fixed cost.

at their efficient scale

When entry and exit of firms in an industry does not affect a firm's cost structure,

Group of answer choices

the long-run market supply curve must be downward-sloping.

we do not have sufficient information to determine the shape of the long-run market supply curve.

the long-run market supply curve must be horizontal.

the long-run market supply curve must be upward-sloping.