Econ DSM 12

A buyer or seller that is unable to affect the market price is called a

price taker

In the short run, the firm should

Operate if price > average variable cost

What is the term given to a cost that has already been paid and cannot be recovered?

Sunk costs

Which of the following is a characteristic of a perfectly competitive market?

There are large numbers of buyers and sellers

Long-run equilibrium in perfect competition results in

both productive and allocative efficiency

If the average total cost curve is above the demand curve, then this firm is

having economic losses

In perfect competition, the marginal revenue is the same as

price

A firm in perfect competition earns profit if

price is greater than average total cost

In perfect competition, when a firm is making positive economic profit in the short run, then new firms enter the market causing the market supply curve to __________ and the market price to __________

shift rightward decrease