ECON 12

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

There are large numbers of buyers and sellers.

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

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