chapter 12 micro

a perfectly competitive firm's supply curve is its a. marginal cost curve above minimum average fixed cost b. marginal cost curve above its minimum average variable cost c. marginal cost curve d. marginal cost curve above its minimum average total cost

b. marginal cost curve above its minimum average variable cost

which of the following is the best example of a perfectly competitive industry a. airplane production b. wheat production c. electricity production d. steel production

b. wheat production

if the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is a. $5 b. $12.50 c. $25 d. $125

c. $25

for a perfectly competitive firm, which of the following is not true at profit maximization a. total revenue minus total cost is maximized b. marginal revenue equals marginal cost c. market price is greater than marginal cost d. price equals marginal cost

c. market price is greater than marginal cost

If a typical firm in a perfectly competitive industry is earning profits, then a. new firms will enter in the long run causing market supply to increase, market price to fall and profits to decrease b. the number of firms in the industry will remain constant in the long run c. new firms will enter in the long run causing market supply to decrease, market price to rise and profits to increase d. all firms will continue to earn profits

a. new firms will enter in the long run causing market supply to increase, market price to fall and profits to decrease

if in a perfectly competitive industry, the market price facing a firm is below its average total cost but above variable cost at the output where marginal cost equals marginal revenue a. new firms are attracted to the industry b. the industry supply will not change c. some existing firms will exit the industry d. firms are breaking even

c. some existing firms will exit the industry

If a perfectly competitive firm's price is above its average total cost, the firm a. should shut down b. is breaking even c. is incurring a loss d. is earning a profit

d. is earning a profit

if, for given output level, a perfectly competitive firm's price is less than its average variable cost, the firm a. should increase output b. should increase price c. is earring a profit d. should shut down

d. should shut down

which of the following is not a characteristic of a perfectly competitive market structure a. all firms sell identical products b. there are a very large number of firms that are small compared to the market c. there are no restrictions to entry by new firms d. there are restrictions on exit of firms

d. there are restrictions on exit of firms