1.Which of the following is a characteristic of perfect competiton? a. Easy Entr

Question

1.Which of the following is a characteristic of perfect competiton?

a. Easy Entry and exit

b. Differentiated products

c. Few Firms

d. None of the above

2. The demand curve for a perfectly competitive firm

a. its production decisions cannot influence the market price

b. consumers are willing to pay any price to obtain its products

c. its product is easy for consumers to differentiate from those of other firms.

d. The firm profits from setting its price higher than the market price

3. The perfectly commpetitive sellers short - run supply curve is

a. its marginal revenue cure

b. its average fixed cost curve

c. the part of its marginal cost curve above the average variable cost curve

d. its entire marginal cost curve

4. for a firm in a perfectly competitive market, average revenu equals

a.the market price

b. the change in total revenue

c. average cost

d. price divided by quantity

5. The short- run shutdown price occurs where price equals

a. AVC at any point

b. AFC at the minimm point

c. AVC at the minimum point

d. MC

6. If a firm is perfectly competitive, then

a. it is impossible for the firm to earn short- run economic profits

b. its marginal cost will exceed marginal revenue at the optimal level of output

c. its demand curve is perfectly elastic

d. jit can independently set the price of the product it sells without reguard to what other firms in the market are doing

7. In a perfectly competitive industry

a. firms can never make an economic profit

b. no buyer or seller can influence ther market price

c. each firm is a price marker

d. there is apt to be a shortage of sellers of output

Explanation / Answer

1 a

2 a

3 c

4 a

5 a

6 c

7 b

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