We only need firms to be price-takers for a market to be perfectly competitive. A. True B. False 2. A competitive equilibrium is Pareto efficient since it equates average willingness-to-pay with marginal cost. A. True B. False 3. Assume that the market for aluminum is perfectly competitive where p is the compet- itive equilibrium price. Suppose the government imposes a price ceiling such that price cannot be greater than some p > 0. In this case, there will be necessarily excess demand for aluminum. A. True B. False 4. If the equilibrium price is higher than the minimum average cost, we can expect that firms will enter the industry. A. True B. False 5. An increase in demand increases the equilibrium price with free entry. A. True B. False Page 2 of 4