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A competitive market is in long-run equilibrium. If demand decreases, what can we be certain will happen to price?

Price will fall in the short run. All firms will shut down and some of them will exit the industry. Price will then rise.

Price will not fall in the short run because firms will exit to maintain the price.

none of the above

Price will fall in the short run. No firms will shut down, but some of them will exit the industry. Price will then rise.

Price will fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise.

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Average revenue (AR) for an individual firm in a perfectly competitive market equals

△(p × q)/△q.

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Use the figure below to answer the following question.

Figure 11.4.4

Refer to Figure 11.4.4, which shows the cost curves for a perfectly competitive firm. If all firms in the market have the same cost curves and the price is $16 per unit,

in the long run, the price will fall as new firms enter the market.

in the long run, firms will leave this market.

none of the above

the firm is making zero economic profit.

the market is in long-run equilibrium.

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Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's total revenue from the sale of donuts is $12,000 a year. Homer's costs are $16,000 in annual rental payments for its five-year lease on its store and $5,000 for ingredients. Should Homer's exit the market in the long run?

Yes, because Homer's is incurring an economic loss.

No, because Homer's is covering its variable costs.

Yes, because all costs are fixed in the long run.

No, because all costs are variable in the long run.

No, because Homer's is covering its fixed costs.

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Use the table below to answer the following questions.

Table 11.2.1

Refer to Table 11.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm. If the firm produces 2 units of output, it

makes an economic profit of $60.

incurs an economic loss of $9.

incurs an economic loss of $69.

makes an economic profit of $9.

incurs an economic loss of $60.

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When a firm in a competitive market receives $500 in total revenue, it has a marginal revenue of $10. What is the average revenue, and how many units were sold?

$50 and 5 units

$5 and 100 units

none of the above

$10 and 50 units

$10 and 100 units

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Use the figure below to answer the following questions.

Figure 11.4.2

Refer to Figure 11.4.2, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run, market

demand will increase.

supply will increase.

supply and market demand will decrease.

demand will decrease.

supply will decrease.

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Use the figure below to answer the following questions.

Figure 11.4.3

Refer to Figure 11.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. In the long run, market

demand will increase.

demand and market supply will both increase.

supply will increase.

demand will decrease.

supply will decrease.

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Use the table below to answer the following questions.

Table 11.2.1

Refer to Table 11.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm. The marginal revenue received from the sale of the 4th unit of output is

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What does diminishing marginal product imply?

None of the above.

The marginal product of an extra worker is less than the previous worker’s marginal product.

The marginal cost of an extra worker is less than the previous worker’s marginal cost.

The marginal product of an extra worker is greater than the previous worker’s marginal product.

The marginal cost of an extra worker is unchanged.

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