Question
Question 1 1pts If the perfectly competitive firm is producing an output level at which price equals marginal cost, it is Group of answer choices
Question 1
1pts
If the perfectly competitive firm is producing an output level at which price equals marginal cost, it is
Group of answer choices
earning profits.
taking losses.
earning normal profit.
There is not enough information to answer the question.
Question 3
1pts
Perfectly competitive firms are price takers for all of the following reasons except that
Group of answer choices
each firm is quite small relative to the total market supply.
buyers and sellers have all the necessary information about prices, etc.
the product is homogeneous.
barriers to exit force firms to sell at the market price.
Question 5
1pts
A perfectly competitive firm that wants to maximize profits or minimize losses will produce in the short run as long as
Group of answer choices
customers are buying its product.
price is above average variable cost.
price is above marginal revenue.
average variable cost is above price.
average total cost is above price.
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Question 6
1pts
A perfectly competitive firm should shut down production in the short run if price is less than average fixed cost at the loss-minimizing level of output.
Group of answer choices
True
False
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Question 7
1pts
Firm X is producing the quantity of output at which marginal revenue equals marginal cost. It is earning
Group of answer choices
a positive economic profit.
an economic loss.
a normal profit.
There is not enough information to answer the question.
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Question 8
1pts
In the theory of perfect competition, the assumption of easy entry into and exit from the market implies
Group of answer choices
positive economic profits in the long run.
losses in the long-run equilibrium.
zero economic profits in the long run.
zero economic profits in both the short run and the long run.
positive economic profits in both the short run and the long run.
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Question 9
1pts
As firms exit an industry, the industry supply curve shifts __________ and the equilibrium price __________ until long-run competitive equilibrium is established and the surviving firms are earning __________ economic profits.
Group of answer choices
leftward; rises; zero
leftward; falls; positive
leftward; rises; positive
rightward; falls; negative
rightward; rises; positive
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Question 10
1pts
If a firm is a price taker, its demand curve is
Group of answer choices
downward sloping.
upward sloping.
perfectly inelastic.
perfectly elastic.
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