1/ Which of the following must be true for an industry to be considered perfectly competitive?

Multiple choices:

a/The product is standardized (every firm sells an identical product)

b/firms sell slightly differentiated products

c/the firms are operating in the short run

d/there are barriers to entry

e/there are economies of scale

2/ What is an oligopoly?

Group of answer choices

An industry dominated by a few large firms

An industry with only 1 firm in it

A firm producing a product that has increasing returns to scale

An industry with a lot of firms producing differentiated products

3/ What does it mean to say that an industry has monopolistic competition?

Group of answer choices

There are many firms producing differentiated products

One firm dominates the industry

A small number of firms produces standardized products

There is free entry in the industry in the long run

4/ Why does it matter whether firms sell identical or differentiated products?

Group of answer choices

If products are different, a firm can raise price without losing as many customers.

When products are identical, demand is more inelastic.

When products are different, demand is more elastic.

5/ A monopolist is ...

Group of answer choices

A firm that is the only producer of a product that has no close substitutes

A firm producing a standardized product

A firm with a patent or control of a scarce resource

A very large firm that earns a profit selling its product

6/ In a perfectly competitive industry, there are barriers preventing new firms from entering the industry.

Group of answer choices

False

True

7/ Which of the following is a type of barrier to entry in an industry?

Group of answer choices

All of the other answers are correct

control of a scarce resource

economies of scale

a patent or copyright

8/ Which of the following is true about perfectly competitive industry in the long run?

Group of answer choices

New firms can enter the industry

Competitive firms will earn a large profit in the long run

No industry is competitive in the long run

All industries are competitive in the long run

The indutry will be dominated by a few large firms

9/ Why does it matter if there is free entry and exit in an industry compared to an industry having barriers to entry?

Group of answer choices

If there is free entry, economic profits will be pushed towards zero as firms enter profitable industries and force prices down

If there is free entry, the industry will end up with a monopoly or oligopoly

If there are barriers to entry then the costs in the industry will be higher and profits will be lower

If there is free entry then the industry will be perfectly competitive

10/ Why does it matter whether firms sell identical products or differentiated products?

Group of answer choices

If the products are identical (standardized), the firm cannont raise price at all

If products are differentiated, there will be more competition in the industry

Customers prefer a standardized product

If products are identical, demand will be more inelastic

11/ Economists assume that firms want to maximize ______

Group of answer choices

economic profit

accounting profit

revenue

profit per unit

12/ Suppose a firm sells 10 units for $5 each and has the following costs: ATC = $4, MC = $3, AVC = $2. What is the firm's total profit?

Group of answer choices

$10

$1

$20

$3

Can't tell without more information