1- A supplier in a perfectly competitive market is characterized by all but which of the following?
A) It can influence the price of its product.
B) It produces such that marginal cost equals price.
C) It can sell all it wants at the prevailing market price.
D) It produces a positive amount in the short run if it can recover variable costs.

2- If you are a wheat farmer and you want to earn as much profit as you can, you should do which of the following:
A) try to produce and sell that quantity of output at which marginal cost has risen to equality with a price.
B) try to produce and sell that quantity of output at which marginal cost is equal to average variable cost.
C) try to produce and sell that quantity of output at which marginal cost has reached
its minimum possible level.
D) never let marginal cost reach equality with price, since this is the point at which profits become zero.

3- The zero-profit point for a perfectly competitive firm occurs where the price
equals the minimum point of the:
A) AVC curve.
B) ATC curve.
C) MC curve.
D) AFC curve.

4- If a firm's demand curve is horizontal, then the firm's marginal revenue is:
A) less than the price of the product.
B) greater than the price of the product.
C) equal to the price of the product.
D) greater than, equal to, or less than the price of the product, depending on the
particular circumstances.

Second: State whether the statements are true or false and correct the false
statements only
1- A perfectly competitive firm is defined as one that can sell all it wants at the prevailing market price.
2- A profit-maximizing competitive firm should produce at the point where marginal cost is lowest.
3- A perfect competitor is defined as one who can earn economic profits, even in the long run.
4- A firm should decrease its output if marginal cost is greater than marginal revenue