Word Bank If you fill in the blanks with words, the grading algorithm will mark
ID: 1225597 • Letter: W
Question
Word Bank
If you fill in the blanks with words, the grading algorithm will mark your answer as incorrect.
Make sure that there are no blanks spaces before or after the number when you enter it.
GRAPH 1
1
a
21
elastic
41
marginal revenue
2
b
22
enter
42
market participants
3
c
23
equal
43
more
4
d
24
equal to
44
normal profit
5
e
25
equals
45
perfectly elastic
6
P(1)
26
exit
46
price
7
p(2)
27
fall
47
productive
8
P(3)
28
firms
48
profits
9
allocative
29
fixed cost
49
rise
10
average fixed cost
30
free entry and exit
50
sellers
11
average revenue
31
greater
51
shut down
12
average total cost
32
homogeneous
52
standardized
13
average variable cost
33
horizontal
53
taker
14
barriers or obstacles
34
industry
54
takers
15
buyers
35
leave
55
total cost
16
competitive
36
less
56
unique
17
continue producing
37
losses
57
unique characteristics
18
downward sloping
38
many
58
upward sloping
19
economic loss
39
marginal cost
59
variable cost
20
economic profit
40
marginal profits
60
zero
QUESTION 1
The market demand curve for a good or service produced by an industry of purely competitive firms is BLANK (refers to direction of slope), whereas the demand curve for a good or service produced by any particular firm in that industry is BLANK . That's because there are many BLANK in that industry producing a goods or services that are BLANK (i.e., indistinguishable from one another). Under such conditions, the only factor that would determine from whom a customer would buy the product would be its BLANK . As a result, each firm within a purely competitive industry is a price BLANK that is, has no ability to control the price it charges. If a particular firm tried to charge a price that was once cent higher than the market price, it would, hypothetically, sell BLANK (enter number from Word Bank that corresponds with the answer, not actual amount) units of output.
4 points
QUESTION 2
If the market price (or its average revenue) were greater than the firms' BLANK , that firm would be making economic BLANK . This would cause other firms to BLANK the industry because in a purely competitive industry there are no BLANK restricting the mobility of resources. As this occurred, the supply of the product would BLANK and thus the price would BLANK .
2 points
QUESTION 3
On the other hand, if the market price (or average revenue) were below the firms' BLANK , they would experience an BLANK . This might cause any particular firm to BLANK the industry. This would certainly happen if the product's price was less than BLANK . However, if the product's price were less than ATC but greater than BLANK , the entrepreneur would BLANK , despite the fact that he is taking an BLANK . That's because if the firm were to BLANK under those circumstances, his losses would be BLANK than they would be if he continued producing.
8 points
Word Bank
If you fill in the blanks with words, the grading algorithm will mark your answer as incorrect.
Make sure that there are no blanks spaces before or after the number when you enter it.
GRAPH 1
Explanation / Answer
QUESTION 1.
The market demand curve for a good or service produced by an industry of purely competitive firms is downward sloping, whereas the demand curve for a good or service produced by any particular firm in that industry is horizontal . That's because there are many sellers in that industry producing a goods or services that are homogeneous (i.e., indistinguishable from one another). Under such conditions, the only factor that would determine from whom a customer would buy the product would be its price . As a result, each firm within a purely competitive industry is a price takers that is, has no ability to control the price it charges. If a particular firm tried to charge a price that was once cent higher than the market price, it would, hypothetically, sell less units of output.
QUESTION 2
If the market price (or its average revenue) were greater than the firms' average total cost , that firm would be making economic profit . This would cause other firms to enter the industry because in a purely competitive industry there are no barriers or obstacles restricting the mobility of resources. As this occurred, the supply of the product would rise and thus the price would fall
QUESTION 3
On the other hand, if the market price (or average revenue) were below the firms' average total cost , they would experience an economic loss . This might cause any particular firm to leave the industry. This would certainly happen if the product's price was less than average total cost . However, if the product's price were less than ATC but greater than average variable cost , the entrepreneur would continue producing , despite the fact that he is taking an losses . That's because if the firm were to shut down under those circumstances, his losses would be more than they would be if he continued producing.
.
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