1. For a perfectly competitive firm, it's demand curve is equivalent to its _______________________ curve, its ________________________ curve, and to ________________________ in the market.

2. A perfectly competitive firms demand curve is horizontal because, in regard to elasticity, the firm's demand curve is ___________________________________.

3. Easy entry and exit explain why the perfectly competitive firm will earn _____________economic profit in the long run.

4. A perfectly competitive firm seeks to maximize profit where _______________ equals marginal costs. This is a slightly different variation of the general profit maximizing rule for all other firms which states profit is maximized where ___________________ equals marginal cost. The reason for the variation is because ________________ and price are equivalent to one another in perfect competition.

5. Marginal revenue is found by dividing the change in _________________ by the change in ____________________.

6. For any market structure, the price a good will sell for is always found on the __________________ curve.

7. Units of a good for which the marginal revenue is ___________________ than the marginal cost will add to a firm's profit. Once marginal revenue is __________________ to the marginal cost, profit has been maximized. Producing units beyond this point will result in marginal revenue being less than marginal cost and profits will _____________________.

8. A firm will earn positive economic profit if price (or average revenue) is greater than ______________________ at the quantity that maximizes profits. A firm will earn a ________ if price is less than __________________________.

9. In the case of a loss, a firm must decide if it should continue to operate or shutdown in the short run. A firm will continue to operate if ________________ is greater than ________________________________________ because the firm will earn enough _____________________ to cover its _____________________ costs and offset a portion of its fixed costs, thus minimizing its loss. A firm will shutdown if __________________ is less than __________________________ because producing will not generate enough _________________ to cover the variable costs it incurs when it chooses to produce.

10. _______________________ acts as incentive for firms to enter and exit the market.

11. Perfectly competitive firms can experience profits or losses when either market ______________ changes or when ______________ at the firm changes.

12. In perfect competition, long run equilibrium occurs where price equals __________________ and it equals ________________________________.

13. A monopoly is considered to be a price ________________ due to the significant market power it has.

14. For a monopoly, price is greater than _____________________________ because the firm must lower price to sell more.

15. A monopoly will never choose to expand production into the ________________ portion of its demand curve because total revenue will decline while costs are rising.

16. Monopolies are able to earn __________________ in the long run because entry into this market structure is extremely difficult.

17. To determine the price a monopoly should charge, you first should find the quantity the monopoly will produce. This occurs at the intersection of ___________________________ and _________________________________. At that quantity, you would then go up to the ____________________ curve to determine price. To show a monopoly earning a positive economic profit, you would place the average total cost curve _________________ the demand curve at the profit maximizing level of output. To show a monopoly breaking even, the average total cost curve would be _______________________ to the demand curve at the profit maximizing level of output. To properly demonstrate a monopoly that is earning a loss but continuing to operate, the ___________________ curve should be placed below the average total cost curve and above the _______________________________ at the profit maximizing level of output. To show a monopoly that should shutdown, the demand curve should be placed below the ___________________________________.

18. A ________________________________ exists when it is cheaper for a single firm to produce a good or service than if multiple firms produced the good.