Question 1Which of the following is not a feature of competitive markets?

options:

a. Identical goods

b. Free entry and free exit

c. Market power

d. Many buyers and many sellers

Question 2In a short-run equilibrium in a competitive market, which of the following is true?

options:

a. P=AVC

b. Existing firms must make zero economic profit

c. Existing firms may make negative economic profit and still remain open

d. P=ATC

Question 3In a long-run equilibrium, which of the following is true?

options:

a. P=AVC

b. Economic profit may be negative

c. P=ATC

d. Accounting profit is zero

Question 4Which of the following is NOT true?

options:

a. The "shut-down" price is a long-run concept

b. In general, the "exit price" is higher than the "shut-down" price

c. At the "exit price", the firm just breaks even

d. In the short run, given the market price, the firm should choose the quantity that satisfies P=MC if it does not shut down.