multiple choice

QUESTION 58 The perfectly competitive firm minimizes losses by shutting down whenever price is below average fixed costs. price is below the minimum point of the average cost curve. price is below the minimum point of the average variable cost curve. total variable costs are greater than total fixed costs. QUESTION 59 The short-run supply curve for a competitive industry is found by summing the supply curves of all the firms horizontally. the industry marginal cost curve. found by summing the firms' supply curves vertically. O horizontal because there are many buyers and sellers. QUESTION 60 Which of the following will occur in response to an unexpected increase in demand in a constant-cost, competitive industry? A. The output will increase with input prices remaining unchanged B. The output of the industry will remain constant. C. Resources will move out of the industry. O D. The existing firms will not be able to expand output sufficiently without incurring huge costs. QUESTION 61 Which one of the following is not an assumption of the competitive model? homogeneous product unrestricted mobility of resources economies of scale possession of all relevant informationQUESTION 62 Price Figure 11-3 T MC MR A AC H B M Demand 0 C E KJ Quantity Reference: Ref 11-3 The unregulated monopolist in Figure 11-3 will produce output O OC. O OE. OJ. Not shown