1. Perfectly competitive markets are economically efficient in the long run, partly because

Select one:

a.firms in these industries produce an output where the price is equal to the minimum average variable cost.

b.entry barriers enable such firms to invest in high-return capital projects.

c.the price consumers are willing to pay for the last unit just equals the cost of having to produce that additional unit.

d.entry and exit guarantees a positive long-run profit above average total cost for each firm.

2.The desire to have government intervene to correct market failure and establish economic efficiency overlooks the fact that

Select one:

a.the market failure may be so severe that even government intervention cannot correct it.

b.government taxation will reduce a company's cost curves so much that it cannot profitably produce the product.

c.lawmakers and regulators usually have incentives to seekothergoals besides economic efficiencyper se.

d.market failure largely does not occur anymore in modern economies; thus, intervention is unnecessary.

3.A firm would not be able to price discriminate if

Select one:

a.there was a significant difference in demand between two different sets of consumers.

b.there were resale opportunities between the consumers in the different markets.

c.it had consumers with different demands that had easily identifiable and distinguishing characteristics.

d.it had an usually high degree of market power.

4.First-degree price discrimination results in maximum profit, but is often not utilized because

Select one:

a.since they are used to single prices being charged in most markets, consumers do not differ in their demands.

b.competition from other firms results in demand curves being horizontal and equivalent toATC

ATCcurves.

c.a firm would not want to operate in a manner similar to a monopoly.

d.the information and negotiation costs in dealing with each individual customer are very expensive.