The model of pure competition is based on :

a. Abstract simplification of complex reality

b. Imperfect information

c. Heterogenity of the product

d. Asymmetric information

2. In the single price monopoly equilibrum , the price will be always:

a. Higher than the MC

b. Lower than the AC

c. Higher than the AR

d. Equal to the AC

3. In pure competiton , the underlying economic reasoning is that:

a. Producers can vary both price and quantity

b. the government sets the so called market price

c. the equailibrum price quantity configuration is not Pareto efficent

d. There is no incentive to charge or pay any price that differs from the market price .

4. The single price monopoly model is based on :

a. Maximization of both the Consumer 's surplus and producer surplus

b. Maximization of the producer surplus

c . Maximization of the consumer surplus

d. Maximization of output alone.