Write C for a purely competitive market, M for a monopolist market/industry, or

Question

Write C for a purely competitive market, M for a monopolist market/industry, or F if neither one. Each teller takes the role of a price taker Shutdown point is when determined selling price is less than a firm's AVC. Firm maximizes profit when determined selling price is equal to average cost In the long run, all costs become variable No good substitutes are available for the good or service the only firm offers Break-even position is when marginal cost is equal to AVC Only more than normal profits can be earned by the firms A firm's supply curve is its variable cost curve Profit is maximized at an output level where MR is equal to MC. The firm and the industry are one. Confined to a geographic area and regulated by a government agency Faces a downward sloping demand curve and must maximize profits given market demand and its cost of production No advertising costs Affects no other firms with his actions and the actions of other firms do not affect him. If selling price is higher than average cost, there is zero profit.

Explanation / Answer

C (because industry is price maker) C (optimal is P=MC and any P

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