1)Assume a perfectly competitive firm is producing a level of output at which MR < MC. What will happen as the firm moves to its profit-maximizing equilibrium?

A)Marginal revenue will rise.B) Marginal revenue will fall.

C) Marginal cost will fall.D) Marginal cost will rise.

2)Which of the following statements about barriers to entry is false?

A)They may be due to legal impediments such as licenses.

B)They are somewhat lessened by the existence of patents.

C)They restrict entry into industries in which positive economic profits are being made.

D)They may be due to a single firm controlling access to a natural resource or production process.

3)Which of the following measures is used by the Justice Department to evaluate the competitive effects of proposed mergers?

A)The four-firm concentration ratio for an industry.

B)The Lerner Index.

C)The Herfindahl-Hirschman Index.

D)The eight-firm concentration ratio for an industry.