Question 1

Suppose a firm in a competitive market earned $2,000 in total revenue and had a marginal revenue of $20 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold?

Accepted Answer

In a competitive market, marginal revenue equals average revenue. Therefore, the average revenue per unit is $20. To find the number of units sold, divide total revenue ($2,000) by the average revenue per unit ($20), which equals 100 units.

Question 2

Table 14-2
The table represents a demand curve faced by a firm in a competitive market.
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollarsper unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} \
\hline 5 & 0 \
\hline 5 & 1 \
\hline 5 & 2 \
\hline 5 & 3 \
\hline 5 & 4 \
\hline 5 & 5 \
\hline
\end{array}$$
-Refer to Table 14-2. For this firm, the average revenue from selling 4 units is

Accepted Answer

Average revenue is calculated as total revenue divided by the quantity sold. Here, the price per unit is constant at $5, so for any quantity sold, the average revenue remains $5 per unit.

Question 3

Table 14-1
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} \
\hline 5 & 0 \
\hline 5 & 2 \
\hline 5 & 4 \
\hline 5 & 6 \
\hline 5 & 8 \
\hline 5 & 10 \
\hline 5 & 12 \
\hline 5 & 14 \
\hline 5 & 16 \
\hline 5 & 18 \
\hline
\end{array}$$
-Refer to Table 14-1. Over what range of output is marginal revenue declining?

Accepted Answer

Marginal revenue is the additional revenue that a firm receives from selling one more unit of a good or service. In the table provided, the price remains constant at $5 per unit regardless of the quantity demanded. This means that for each additional unit sold, the revenue increases by the same amount ($5), indicating that marginal revenue does not decline but remains constant across all levels of output.

Question 4

If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will

Accepted Answer

In a perfectly competitive market, the price remains constant regardless of the quantity of output sold, so if the quantity of output sold triples, total revenue also triples.

Question 5

Table 14-3
The table represents a demand curve faced by a firm in a competitive market.
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Total Revenue } \
\text { (Dollars) }
\end{array} \
\hline 13 & 91 \
\hline 15 & 105 \
\hline 17 & 119 \
\hline 19 & 133 \
\hline 21 & 147 \
\hline
\end{array}$$
-Refer to Table 14-3. For this firm, the marginal revenue of the 15th unit is

Accepted Answer

The marginal revenue of the 15th unit is calculated by the change in total revenue when the quantity demanded increases from 13 to 15 units. From the table, total revenue increases from $91 to $105, which is a change of $14. Since this change is over 2 units (from 13 to 15 units), the marginal revenue per unit is $14 / 2 = $7.

Question 6

Table 14-4
The following table presents cost and revenue information for a firm operating in a competitive industry.
​
​
 
-Refer to Table 14-4. What is the marginal revenue from selling the 3rd unit?

Accepted Answer

The answer of Table 14-4
The following table presents cost and...

Question 7

Which of the following statements is correct?

Accepted Answer

For competitive firms, both average revenue (total revenue divided by quantity sold) and marginal revenue (the change in total revenue from selling one more unit) equal the price of the good. This is because competitive firms are price takers and cannot influence the market price.

Question 8

Table 14-3
The table represents a demand curve faced by a firm in a competitive market.
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} & \begin{array} { c } 
\text { Total Revenue } \
\text { (Dollars) }
\end{array} \
\hline 13 & 91 \
\hline 15 & 105 \
\hline 17 & 119 \
\hline 19 & 133 \
\hline 21 & 147 \
\hline
\end{array}$$
-Refer to Table 14-3. For this firm, the average revenue when 17 units are produced and sold is

Accepted Answer

Average revenue is calculated by dividing total revenue by the quantity demanded. For 17 units, the total revenue is $119. Therefore, the average revenue is $119 / 17 = $7.

Question 9

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales. If the firm increases its output to 200 units, the average revenue of the 200th unit will be

Accepted Answer

The average revenue per unit is calculated by dividing the total revenue by the number of units sold. In a competitive market, the price per unit (and thus the average revenue per unit) remains constant regardless of the quantity sold. Since the firm initially earns $1,800 from 150 units, the average revenue per unit is $12 ($1,800 / 150 units). Therefore, the average revenue of the 200th unit will also be $12, as the price per unit does not change with the quantity sold in a competitive market.

Question 10

Table 14-1
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} \
\hline 5 & 0 \
\hline 5 & 2 \
\hline 5 & 4 \
\hline 5 & 6 \
\hline 5 & 8 \
\hline 5 & 10 \
\hline 5 & 12 \
\hline 5 & 14 \
\hline 5 & 16 \
\hline 5 & 18 \
\hline
\end{array}$$
-Refer to Table 14-1. Over which range of output is average revenue equal to price?

Accepted Answer

Average revenue is calculated as total revenue divided by quantity sold. Since price remains constant at $5 per unit regardless of the quantity demanded, average revenue equals the price of $5 across all quantities, meaning it is equal to price over the entire range of output.

Question 11

Table 14-4
The following table presents cost and revenue information for a firm operating in a competitive industry.
​
​
 
-Refer to Table 14-4. What is the total revenue from selling 4 units?

Accepted Answer

The answer of Table 14-4
The following table presents cost and...

Question 12

Table 14-2
The table represents a demand curve faced by a firm in a competitive market.
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollarsper unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} \
\hline 5 & 0 \
\hline 5 & 1 \
\hline 5 & 2 \
\hline 5 & 3 \
\hline 5 & 4 \
\hline 5 & 5 \
\hline
\end{array}$$
-Refer to Table 14-2. This firm maximizes total revenue by producing

Accepted Answer

Total revenue is maximized when the firm produces as many units as possible since the price remains constant at $5 per unit regardless of the quantity demanded.

Question 13

Table 14-4
The following table presents cost and revenue information for a firm operating in a competitive industry.
​
​
 
-Refer to Table 14-4. What is the average revenue when 3 units are sold?

Accepted Answer

Average revenue is calculated by dividing total revenue by the number of units sold. If 3 units are sold and the total revenue is $360, then the average revenue is $360/3 = $120.

Question 14

Table 14-1
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} \
\hline 5 & 0 \
\hline 5 & 2 \
\hline 5 & 4 \
\hline 5 & 6 \
\hline 5 & 8 \
\hline 5 & 10 \
\hline 5 & 12 \
\hline 5 & 14 \
\hline 5 & 16 \
\hline 5 & 18 \
\hline
\end{array}$$
-Refer to Table 14-1. If the firm doubles its output from 6 to 12 units, total revenue will

Accepted Answer

Total revenue is calculated as price multiplied by quantity. Since the price remains constant at $5 per unit, doubling the quantity from 6 to 12 units results in an increase in total revenue by $30 (6 units x $5 = $30).

Question 15

If Buddy's Build A Bear Shop sells its product in a competitive market, then

Accepted Answer

In a competitive market, firms are price takers, meaning the price is constant regardless of the quantity sold. Therefore, total revenue is proportional to the quantity of output.

Question 16

Which of the following statements regarding a competitive firm is correct?

Accepted Answer

In a competitive market, each firm is a price taker, meaning it cannot influence the market price of its product. Therefore, the price at which a firm sells its product is equal to the average revenue (the total revenue divided by the quantity sold). Choices A, B, and C describe scenarios more applicable to firms with market power or in imperfectly competitive markets, not competitive firms.

Question 17

Suppose a firm in a competitive market increases its output by 25 percent. As a result, the price of its output is likely to

Accepted Answer

In a competitive market, individual firms are price takers, meaning the price is determined by the market supply and demand. A single firm increasing its output has a negligible effect on the overall market price.

Question 18

Table 14-2
The table represents a demand curve faced by a firm in a competitive market.
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollarsper unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} \
\hline 5 & 0 \
\hline 5 & 1 \
\hline 5 & 2 \
\hline 5 & 3 \
\hline 5 & 4 \
\hline 5 & 5 \
\hline
\end{array}$$
-Refer to Table 14-2. For this firm, the marginal revenue from selling the next unit is

Accepted Answer

In a competitive market, the price is constant, so the marginal revenue from selling an additional unit is equal to the price, which is $5.

Question 19

Which of the following firms is the closest to being a perfectly competitive firm?

Accepted Answer

An avocado farmer in California is the closest to being a perfectly competitive firm because the market for avocados is characterized by many producers, a homogeneous product, and easy market entry and exit, which align closely with the characteristics of perfect competition.

Question 20

Table 14-1
​
​
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Units) }
\end{array} \
\hline 5 & 0 \
\hline 5 & 2 \
\hline 5 & 4 \
\hline 5 & 6 \
\hline 5 & 8 \
\hline 5 & 10 \
\hline 5 & 12 \
\hline 5 & 14 \
\hline 5 & 16 \
\hline 5 & 18 \
\hline
\end{array}$$
-Refer to Table 14-1. The price and quantity relationship in the table is most likely a demand curve faced by a firm in a

Accepted Answer

The table shows a constant price regardless of the quantity demanded, which is characteristic of a perfectly competitive market where firms are price takers and cannot influence the market price.

Quiz 14: Firms in Competitive Markets

Suppose a firm in a competitive market earned $2,000 in total revenue and had a marginal revenue of $20 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold?

If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-4. What is the marginal revenue from selling the 3rd unit?

Which of the following statements is correct?

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales. If the firm increases its output to 200 units, the average revenue of the 200th unit will be

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-4. What is the total revenue from selling 4 units?

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-4. What is the average revenue when 3 units are sold?

If Buddy's Build A Bear Shop sells its product in a competitive market, then

Which of the following statements regarding a competitive firm is correct?

Suppose a firm in a competitive market increases its output by 25 percent. As a result, the price of its output is likely to

Which of the following firms is the closest to being a perfectly competitive firm?

Quiz 14: Firms in Competitive Markets

Suppose a firm in a competitive market earned $2,000 in total revenue and had a marginal revenue of $20 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold?

If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. ​ ​ -Refer to Table 14-4. What is the marginal revenue from selling the 3rd unit?

Which of the following statements is correct?

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from the sales. If the firm increases its output to 200 units, the average revenue of the 200th unit will be

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. ​ ​ -Refer to Table 14-4. What is the total revenue from selling 4 units?

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. ​ ​ -Refer to Table 14-4. What is the average revenue when 3 units are sold?

If Buddy's Build A Bear Shop sells its product in a competitive market, then

Which of the following statements regarding a competitive firm is correct?

Suppose a firm in a competitive market increases its output by 25 percent. As a result, the price of its output is likely to

Which of the following firms is the closest to being a perfectly competitive firm?

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-4. What is the marginal revenue from selling the 3rd unit?

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-4. What is the total revenue from selling 4 units?

Table 14-4 The following table presents cost and revenue information for a firm operating in a competitive industry. -Refer to Table 14-4. What is the average revenue when 3 units are sold?