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-Refer to the above table. This firm operates in a perfectly competitive market in which the market price is $5/unit. What is true when the firm produces 110 units? A) Total revenue equals $3,075. B) Total costs exceed total revenue by $65. C) Marginal revenue is more than marginal cost. D) Its total profit is $65. -Refer to the above table. This firm operates in a perfectly competitive market in which the market price is $5/unit. What is true when the firm produces 110 units?


A) Total revenue equals $3,075.
B) Total costs exceed total revenue by $65.
C) Marginal revenue is more than marginal cost.
D) Its total profit is $65.

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-In the long run, the price for a perfectly competitive firm A) will be determined by the firm's supply and demand curves. B) will allow for positive economic profits. C) will equal marginal cost where marginal cost is at a minimum. D) will equal the minimum average total cost. -In the long run, the price for a perfectly competitive firm


A) will be determined by the firm's supply and demand curves.
B) will allow for positive economic profits.
C) will equal marginal cost where marginal cost is at a minimum.
D) will equal the minimum average total cost.

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Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a higher long-run price, we know that


A) this is a decreasing-cost industry.
B) this is an increasing-cost industry.
C) some firms will be losing money in the long run.
D) after further adjustments, price will fall to its original level.

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Economic profits are maximized at the point at which


A) marginal revenues equal marginal costs.
B) accounting profit exceeds economic profit.
C) total revenues are greater than total costs.
D) accounting profits are equal to zero.

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-A perfectly competitive industry's short-run supply curve is best described as A) the upward sloping portion of the industry's marginal cost curve. B) horizontal. C) perfectly inelastic. D) the horizontal summation of the individual firms' supply curves. -A perfectly competitive industry's short-run supply curve is best described as


A) the upward sloping portion of the industry's marginal cost curve.
B) horizontal.
C) perfectly inelastic.
D) the horizontal summation of the individual firms' supply curves.

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Each firm in a perfectly competitive industry is


A) producing a unique product.
B) relatively large.
C) a price taker.
D) a price setter.

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What is always true about the short-run equilibrium position for a firm in perfect competition?


A) MR = MC = P = ATC = AR
B) TR = TC
C) MR = MC = P = AR
D) MC = ATC

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If firms in a perfectly competitive industry are earning positive economic profits, then what will happen in the long run?

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Economic profits provide incentives for ...

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-In the above figure, assume d3 is the demand curve faced by this firm. Which is true? A) This firm is earning an economic profit. B) This firm is experiencing an economic loss. C) This firm is breaking even. D) This firm's total revenues equal HRD0. -In the above figure, assume d3 is the demand curve faced by this firm. Which is true?


A) This firm is earning an economic profit.
B) This firm is experiencing an economic loss.
C) This firm is breaking even.
D) This firm's total revenues equal HRD0.

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A true signal must


A) convey information only.
B) convey information and direct the resource owners to act appropriately.
C) convey information about the long-run future.
D) explain in detail why something should be done.

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Explain what happens to the long-run supply curve of an industry when firm entry raises the price of inputs used in the industry.

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When firm entry raises the price of inpu...

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For a perfect competitor, marginal revenue equals


A) the slope of the demand curve.
B) average revenue divided by price.
C) price divided by average revenue.
D) the market price.

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In a perfectly competitive market structure any firm can enter or leave the industry without serious impediments. This implies


A) the products sold will be alike.
B) firms will move labor and capital in pursuit of profit-making opportunities to whatever business venture gives them the highest return on their investment.
C) no one buyer or seller has any influence on price.
D) consumers are able to find out about lower prices charged by other firms.

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In an increasing-cost industry, an increase in output will lead to


A) an downward shift in the ATC curve.
B) an downward shift in the MC curve.
C) a reduction in long-run per-unit costs.
D) an increase in long-run per-unit costs.

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Which of the following statements is not true for a perfectly competitive firm?


A) A firm's demand curve is horizontal.
B) The firm can influence its demand curve by advertising its product.
C) The firm's demand curve is perfectly elastic.
D) The market demand and supply curves determine the market price.

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What is the shape of the long-run supply curve in a decreasing-cost industry?


A) Horizontal
B) Increasing
C) Downward sloping
D) Upward sloping

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A perfectly competitive market has


A) high barriers to entry or exit.
B) homogeneous products.
C) to do a lot of advertising to attract buyers.
D) few firms.

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The marginal revenue curve of a perfectly competitive firm


A) has a vertical intercept equal to exactly one-half of the vertical intercept for the demand curve.
B) lies below the demand curve and above the average revenue curve.
C) intersects the average revenue curve from above at the maximum point of the average revenue curve.
D) is also the demand curve faced by the firm.

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When demand is perfectly elastic, marginal revenue is


A) zero.
B) equal to price.
C) declining.
D) increasing.

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A firm earning economic losses should operate in the short run as long as


A) the price per unit sold is greater than the average fixed cost per unit produced.
B) the price per unit sold is greater than the average variable cost per unit produced.
C) marginal revenue is at least the price per unit sold.
D) the price per unit sold is equal to or greater than the marginal cost of production.

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