ch 7 section 1 quiz
A firm facing a horizontal demand curve:
cannot affect the price it receives for its output. is unlikely to price its goods below market price. faces a perfectly elastic demand curve for its product.
The perfectly competitive model assumes that:
firms can enter and exit the industry with relative ease.
Which of the following is a characteristic of perfect competition?
homogeneous products
A perfectly competitive firm faces a demand curve that is:
horizontal and perfectly elastic.
The horizontal demand curve facing an individual firm in a perfectly competitive market:
is a reflection of the firm's small size relative to the total market.
Which of the following is true about perfect competition?
All of the above are true about perfect competition.
Which of the following is false of perfectly competitive firms?
Because perfectly competitive firms are price takers, each firm's demand curve remains unchanged even when the market price changes
Which of the following is true of perfectly competitive firms?
It is difficult for entrepreneurs to become suppliers of a product in a perfectly competitive market structure. A perfectly competitive firm has a perfectly elastic supply curve. In a perfectly competitive market, an individual seller can change his price and it will not alter the output he sells. None of the above are true.*****
Perfect competition is the term used to describe:
an industry in which numerous price-taking firms produce identical products.
A perfectly competitive firm has no influence over price because:
its output is insignificant relative to the market as a whole.
A perfectly competitive firm is a:
price taker.
A competitive firm facing a perfectly elastic demand curve can:
sell all of its output at the market price.
If the market demand curve in a perfectly competitive industry shifts right, the demand curve for each existing firm will:
shift up.
In a perfectly competitive industry, influence over price is exerted by:
the forces of supply and demand.
Which of the following best resembles a perfectly competitive market?
the stock market