Economic profit: Answer Question 13 answers is the difference between total reve

Question

Economic profit:
Answer
Question 13 answers

is the difference between total revenue and total fixed costs.

(per unit) is price minus average total cost.

as a total amount, is (P - AVC) times quantity.

is correctly described by all of the above.

2 points
Question 14

Question 14 text

Economic profit in long-run equilibrium in perfect competition will be:
Answer
Question 14 answers

less than accounting profit.

equal to accounting profit.

greater than accounting profit.

negative.

2 points
Question 15

Question 15 text

For a firm in a perfectly competitive market:
Answer
Question 15 answers

marginal revenue equals total revenue.

marginal revenue equals price and average revenue.

net revenue equals price.

net revenue equals marginal revenue.

2 points
Question 16

Question 16 text

Accounting costs include both explicit and implicit costs.
Answer
Question 16 answers
True
False

2 points
Question 17

Question 17 text

Which of the following is true?
Answer
Question 17 answers

Price and average revenue are never equal.

Price and marginal revenue are seldom equal under conditions of perfect competition.

When a firm is operating under perfectly competitive market conditions, price and marginal cost will always be equal if the firm is maximizing profits.

Average revenue equals price times quantity.

2 points
Question 18

Question 18 text

If a perfectly competitive industry is characterized by constant costs in the long run, its long-run:
Answer
Question 18 answers

marginal revenue curve is vertical.

marginal cost curve is vertical.

industry supply curve is horizontal.

average fixed cost curve is horizontal.

2 points
Question 19

Question 19 text

Total economic profit is (price minus average total cost) times quantity.
Answer
Question 19 answers
True
False

2 points
Question 20

Question 20 text

An assumption of the model of perfect competition is:
Answer
Question 20 answers

difficult entry and exit.

few buyers and sellers.

complete information.

different goods.

2 points
Question 21

Question 21 text

If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 11 units is:
Answer
Question 21 answers

$10.

$20.

$200.

$220.

Explanation / Answer

1.(per unit) is price minus average total cost. 2.ess than accounting profit. 3.marginal revenue equals price and average revenue. 4.True 5.Price and marginal revenue are seldom equal under conditions of perfect competition. 6.marginal cost curve is vertical. 7.False 8.difficult entry and exit. 9.$20.

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