Practice Long Run Supply Curve Of A Firm (4.4.2) - The Theory of the Firm under Perfect Competition

Practice: Long Run Supply Curve of a Firm

Lesson 4.4.2The Theory of the Firm under Perfect Competition

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9 questions

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2 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What happens to a firm's supply curve when average costs fall?
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Consider how costs relate to supply decisions.
Question 2.
What defines the shut down point in the long run?
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Think about costs when deciding to produce.
3Question 3.
What does a leftward shift in a firm's supply curve indicate?
- Increased production
- Increased costs
- Reduced market price
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Think about how costs affect supply.
4Question 4.
True or False: A firm will continue producing if the price is greater than its average cost.
- True
- False
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Consider when firms face losses.
Question 5.
A firm faces a market price decrease from its equilibrium price. Describe the steps the firm should take to optimize its operation in the long run. Include in your response how this adjustment affects its supply curve.
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Link shifts in costs to changes in supply.
Question 6.
Consider a firm's long run average cost declines due to technological improvements. Calculate the impact on its supply level and market price given a fixed market demand.
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Explore how efficiency affects competitive dynamics.

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