Economics

In long-run equilibrium a perfectly competitive firm will operate where the price is

equal to MR, MC, and minimum to ATC

In the short run a firm should shutdown if it cannot

Cover its variable cost

When a firm has the power to establish its price

P>MR

Demand facing an individual, perfectly competitive firm is

Perfectly elastic at the price at the price determined by the market forces

Which is a required characteristic of of a perfectly competitive industry There are few firms so that none can influence the market price Products are highly differentiated Barriers to entry are high

None of the above

A firm that seeks to maximize its revenue is most likely to adhere to which of the following

MR=0

A feature of a perfect competition is

Standardized products

When MR=MC

Total profit is maximized

which of the following characteristics is most important in differentiating between perfect competition and all other types of markets

Whether or not firms are price takers

If an industry could be organized either perfectly competitive or monopoly, a monopoly would

produce less input produce where p>MC Charge higher prices

In perfect competition, if firms enter the market in the long run

total supply will increase causing market price to decrease

For a demand curve that is horizontal, the marginal revenue curve

will be the same as the demand curve