1. In perfect competition, the demand curve faced by the individual firm is _______and the demand curve faced by the whole industry is_____. Question options: Downward sloping, downward sloping Downward sloping, perfectly elastic (horizontal) Perfectly elastic (horizontal) , downward sloping Perfectly elastic (horizontal), U-shaped 2. According to the optimal output rule, a price taking firm's profit is maximized by producing the quantity at which: options: The total revenue is equal to the total cost of production The market price is equal to the marginal cost The marginal revenue is equal to the variable cost The market price is equal to the variable cost 3. Suppose you are an analyst and your job is to determine whether the orange juice market is competitive. To do this, you compute the Herfindahl-Hirschman Index (HHI) and report it to your boss. If there are only 5 producers of orange juice and each supplies 200,000 cartons of juice in equilibrium, what is the HHI Index for this industry? options: 6000 2000 4000 There is not enough information to calculate the HHI 4. Which of the following statements is TRUE? In an oligopoly, options: firms always collude to keep prices high. firms always engage in non-cooperative behaviour firms always produce some quantity strictly less than perfectly competitive and strictly greater than the monopoly quantity multiple outcomes are possible depending on how firms interact with each other