1. A perfectly competitive firm is currently in long run equilibrium. Its total

Question

1. A perfectly competitive firm is currently in long run equilibrium. Its total revenue is $100,000, and the average total cost of production is $100. Which of the following can be concluded from this information?   

a.The firm's marginal cost is $1,000, and its profit is positive.

   b.The firm's marginal cost is $1,000, and its profit is zero.

   c.The firm's output is 1,000 units, and its profit is negative.

   d.The firm's output is 1,000 units, and its profit is zero.

   e.The firm's output is 1,000 units, and its profit is positive.

2.  In the short run in perfect competition, the industry's demand curve and a firm's demand curve have which of the following slopes?

a. Industry's demand curve : Horizontal         -           Firm's demand curve: Downward sloping

b.Industry

Explanation / Answer

d.The firm's output is 1,000 units, and its profit is zero.

c.Industry

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