1. Equilibrium output for firms occurs where

1. Profit is maximized.
2. Revenue ir rising.
3. Profit is rising.
4. Revenue is maximized.

2. A firm would increase profits if it

1. Increased output when MR>MC.
2. Increased output when MC>MR.
3. Shut down because MR = MC
4. Decreased output when MR > MC.

3. The supply curve for a perfectly competitive industry is obtained by

1. Vertically summing the supply curves of firms is the industry.
2. Horizontally summing the supply curves of firms in the industry.
3. Horizontally summing the average cost curves of firms in the industry.
4. Making an empirical study of historical data.

4. For a perfectly competitive firm, marginal revenue equals average revenue because the

1. Firms demand curve is horizontal.
2. Firms supply curve is horizontal
3. Industry's supply curve is horizontal
4. industry's demand curve is horizontal

5. Which of the following observations is not true.

1. The demand curve of the perfectly competitive industry is perfectly elastic.
2. There is only one price for a product in a perfectly competitive market.
3. The demand curve of the perfectly competitive firm is perfectly elastic.
4. A firm in a perfectly competitive market can sell as much as it wants at the market price.

6. A perfectly competitive firm should continue to expand output until

1. Marginal revenue equals marginal cost.
2. Total revenue exceeds total costs.
3. Average revenue equals variable cost
4. Total revenue exceeds variable cost.

7. A perfectly competitive firm's marginal revenue is.

1. Determined by the firm's supply curve.
2. Less than average revenue.
3. Adequate to cover all short run costs.
4. Constant and identical to price.

8. Which of the following is not a characteristic of perfect competition?

1. All goods sold are identical
2. Sellers can enter the market easily
3. All consumers have identical individual demand curves.
4. Firms and consumers all have perfect information about the good and market.

9. At the optimal level of output where MR=MC?

1. The firm is making profit.
2. Any of these can occur.
3. The firm is breaking even.
4. The firm is making losses.

10. The quantity which a firms will supply in the short run

1. Can be read from its average cost curve.
2. Is always zero above minimum average variable cost
3. Can be read from the firm's marginal cost curve above average variable cost
4. Can be read from its average variable cost curve.