Econ 2302 Debra Webb Chapter 12 Quiz

question

A perfectly competitive firm is a:

answer

price taker

question

Which of the following is a characteristic of perfect competition?

answer

none of the above

question

A perfectly competitive firm faces a demand curve that is:

answer

horizontal and perfectly elastic

question

Marginal revenue for a perfectly competitive firm equals:

answer

average revenue at all levels of output.

question

A perfectly competitive firm has no influence over price because:

answer

its output is insignificant relative to the market as a whole

question

For a perfectly competitive firm, average revenue is:

answer

equal to marginal revenue at all levels of output & equal to price at all levels of output

question

In the short run, a perfectly competitive firm will maximize profit by producing where

answer

MC = MR

question

"I'm losing money, but since my fixed costs are so high, I simply cannot afford to shut down." If the firm were attempting to maximize profit, this decision may be:

answer

correct if the firm is covering all of its variable costs

question

Assume that the equilibrium price in a perfectly competitive industry is $4.25. If a firm in this industry produced and sold 10 units with an average total cost of $5.00, what would be the result would be:

answer

a loss of $7.50

question

Economic losses caused several firms to leave the car wash business in Portland, Oregon. Though prices have risen, firms are still leaving the industry. Apparently:

answer

firms are still generating economic losses

question

Firms will continue to enter a competitive industry until:

answer

any economic profits have been competed away

question

In long-run perfectly competitive equilibrium:

answer

all firms earn zero economic profits

1 of 12

question

A perfectly competitive firm is a:

answer

price taker

question

Which of the following is a characteristic of perfect competition?

answer

none of the above

question

A perfectly competitive firm faces a demand curve that is:

answer

horizontal and perfectly elastic

question

Marginal revenue for a perfectly competitive firm equals:

answer

average revenue at all levels of output.

question

A perfectly competitive firm has no influence over price because:

answer

its output is insignificant relative to the market as a whole

question

For a perfectly competitive firm, average revenue is:

answer

equal to marginal revenue at all levels of output & equal to price at all levels of output

question

In the short run, a perfectly competitive firm will maximize profit by producing where

answer

MC = MR

question

"I'm losing money, but since my fixed costs are so high, I simply cannot afford to shut down." If the firm were attempting to maximize profit, this decision may be:

answer

correct if the firm is covering all of its variable costs

question

answer

a loss of $7.50

question

Economic losses caused several firms to leave the car wash business in Portland, Oregon. Though prices have risen, firms are still leaving the industry. Apparently:

answer

firms are still generating economic losses

question

Firms will continue to enter a competitive industry until:

answer

any economic profits have been competed away

question

In long-run perfectly competitive equilibrium:

answer

all firms earn zero economic profits

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Econ 2302 Debra Webb Chapter 12 Quiz

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