The demand curve faced by a perfectly competitive firm is horizontal.

Question 1 options:

True

False

Question 2

What is marginal revenue?

the addition to total revenue from selling one more unit of output

the addition to total output from hiring one more unit of labour

the addition to total profit from selling one more unit of output

the additional cost incurred from producing one more unit of output

The market demand curve in a perfectly competitive industry is downward sloping, while the demand curve faced by an individual perfectly competitive firm is horizontal.

Question 3 options:

True

False

Which of the following is a property of the demand curve facing a perfectly competitive firm?

Question 4 options:

It is unit elastic.

It is downward sloping.

It is perfectly inelastic.

It is perfectly elastic.

Question 5

It is difficult for firms to enter and exit a perfectly competitive market.

True

False