Econ 213 quiz 9 answers

Chuck Diesel Burger is a food truck in Houston, Texas. Imagine that Chuck Diesel Burger’s minimum average total cost (ATC) is $3.75 and that its minimum average variable cost (AVC) is $2.50. Assume there are no barriers to entry into or exit from the food-truck market. Chuck Diesel Burger will make a positive economic profit if the price is equal to:

The market for hot dogs on the streets of New York City can be considered close to a perfectly competitive market. Because there are so many individuals buying and selling hot dogs:

Refer to the accompanying table. A firm participating in a competitive market with these costs would always shut down if the price is:

Signals:

Firms in every market structure:

It’s easy to determine if a firm is making long-run production decisions by looking at its cost structure because, in the long run, a firm does not have any:

Holding all else constant, a decrease in the market demand for a product in a competitive market would cause:

Because of market forces, firms have _________ when competition is widespread.

In competitive markets:

If the market price of a product is between the minimum average variable cost (AVC) and minimum average total cost (ATC) of a firm, that firm will:

Assume that a firm’s costs are split between variable costs and fixed costs. Once variable costs are covered:

Refer to the accompanying table. A firm participating in a competitive market with these costs would break even if the price is:

Refer to the accompanying figure. A firm would be suffering a loss but still be producing if the price is: