1. In the long-run, large firms will produce at ......................

Select one:

a.

the intersection of average cost and fixed cost

b.

the minimum efficient scale

c.

prices they desire

d.

the minimum marginal cost

e.

intersection of fixed and variable cost

2. For a perfect competitive firm, if the market price is $40, the average revenue of selling five units is --------------------------

Select one:

a.

$40.

b.

$20.

c.

$8.

d.

$250.

e.

$200.

3. The "free exit and entry" assumption in a perfect market structure ensures that

Select one:

a.

The industry operates optimally

b.

there is perfect information in the market

c.

a monopoly firm cannot dominate the market

d.

government regulates the industry well

e.

profits are driven down to the break-even level in the long-run