1. If a firm is operating under perfect competition, then its supply curve in the short run is a. the entire average variable cost curve b. the portion of the average variable cost curve that is upward sloping c. the entire marginal cost curve d. the portion of the marginal cost curve that is above the minimum of the average total cost curve e. the portion of the marginal cost curve that is above its intersection with the average variable cost curve 2. A firm operating under perfect competition will shut down in the short run if a. total fixed costs are too high. b. total revenue from operating would not cover all costs. c. total revenue from operating would not cover variable costs. d. total revenue from operating would not cover fixed costs. 3. The shape of the demand curve of a firm operating under perfect competition a. is always downward sloping b. is always upward sloping c. is always horizontal d. depends on the demand side of the market e. depends on whether it is in the short run or long run 4. A firm is operating under perfect competition in the short run. Its short run cost function is C(q) = 2q2 + 5. Suppose that the market price is $8. What is the firm's profit? a. $2 b. $3 C. $8 . $13 e. $16 5. 40 identical firms are operating in a perfectly competitive market in the short run. Each firm's short run cost function is C(q) = 2q2 + 5. The market demand is Q = 80 - 10p. What is the short run equilibrium market price? a. $2 b. $4 C. $5 . $8 e. $10