P10.1 Competitive Markets Concepts. Indicate whether each of the following statements is true or false, and explain why.

A. In long-run equilibrium, every firm in a perfectly competitive industry earns zero profit.

B. Perfect competition exists in a market when all firms are price takers as opposed to price makers.

C. In competitive markets, P MC at the profit-maximizing output level

D. Downward-sloping industry demand curves characterise perfectly competitive markets.

P11.1 Social Welfare Concepts. Indicate whether each of the following statements is true or false, and explain why.

A.In competitive market equilibrium, social welfare is measured by the net benefits derived from consumption and production as measured by the difference between consumer surplus and producer surplus.

B. The market supply curve indicates the minimum price required by sellers as a group to bring forth production.

C. Consumer surplus is the amount that consumers are willing to pay for a given good or service minus the amount that they are required to pay.

D. Whereas consumer surplus is closely related to the supply curve for a product, producer surplus is closely related to the demand curve for a product.