perfectly competitive firm.
212 8 • Critical Thinking Questions

13. What is a “price taker” firm?

14. How does a perfectly competitive firm decide what price to charge?

15. What prevents a perfectly competitive firm from seeking higher profits by increasing the price that it

charges?

16. How does a perfectly competitive firm calculate total revenue?

17. Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.

18. What two rules does a perfectly competitive firm apply to determine its profit-maximizing quantity of

output?

19. How does the average cost curve help to show whether a firm is making profits or losses?

20. What two lines on a cost curve diagram intersect at the zero-profit point?

21. Should a firm shut down immediately if it is making losses?

22. How does the average variable cost curve help a firm know whether it should shut down immediately?
{"creationdate": "2022-12-07T14:15:44-06:00", "file_type": ".pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "moddate": "2022-12-07T14:23:05-06:00", "total_pages": 597, "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "batch_upload": true, "title": "Principles of Microeconomics 3e", "file_size_mb": 26.99, "uploaded_via": "batch_uploader", "producer": "Prince 14.2 (www.princexml.com)", "upload_timestamp": "2026-02-07T15:24:38.309401", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "creator": "PDFMiner", "file_name": "Microeconomics3e.pdf"}