36) Which of the following distinguishes the short run from the long run in pure

Question

36) Which of the following distinguishes the short run from the long run in pure competition? 36) A) The quantity of labor hired can vary in the long run but not in the short run. B) Firms use the MR MC rule to maximize profits in the short run but not in the long run C) Firms can enter and exit the market in the long run but not in the short run s attempt to maximize profits in the long run but not in the short run. D) Firm 37) 37) ATC MC VC MR Quantity Refer to the diagram. To maximize profit or minimize losses, this firm will produce: A) D units at price J C) E units at price B B) E units at price A. D) K units at price C. 38) Pure monopoly refers to: 38) A) a single firm producing a product for which there are no close substitutes. B) a large number of firms producing a dafferentiated product C) any market in which the demand curve to the fim is downsloping. D) a standardized product being produced by many firms. 39) 39) Which of the following is correct? A) A purely competitive firm is a "price maker," while a monopolistis a "price taker." B) Both purely competitive and monopolistic firms are "price makers." C) Both purely competitive and monopolistic firms are "price takers." D) A purely competitive firm is a "price taker." while a monopolist is a "price maker." A-7

Explanation / Answer

36. Option c is correct

37. Option b is correct (MR = MC is where the profit is maximized)

38. Option a is correct (by definition)

39. Option d is correct (Price is a given for a competitive firm while monopolist decides the price)

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