Perfect Competition (Lecture)

Multiple Choice

In a perfectly competitive market, who are considered price takers?

• Both consumers and producers

• Only consumers

• Only producers

• Neither consumers nor producers

Open Ended

Why do you think consumers or producers can't change the price in a perfectly competitive market?

Dropdown

The supply and demand model is a model of a ___ competitive market.

Select answer

Multiple Choice

Which of the following is true about the number of sellers in a perfectly competitive market?

• There are generally hundreds or thousands of sellers.

• There is only one seller.

• There are a few sellers dominating the market.

• The number of sellers is irrelevant.

Multiple Choice

In a perfectly competitive market, consumers must regard all products to be ___________.

• identical
• differentiated

• similar

• typical

Multiple Choice

What is meant by 'free entry and exit' in the context of perfectly competitive markets?

• Firms can easily enter or leave the market

• Only established firms can participate

• Entry is restricted by government regulations

• Firms must pay a high fee to enter

Multiple Choice

Why do perfectly competitive markets not have long-run economic profits?

• Sellers are forced to price their products at a loss.

• Any profits being earned would cause other firms to enter the market.

• There are too many sellers.

• There are not enough buyers.

Multiple Choice

Which of the following is NOT a characteristic of a perfectly competitive market as described in the images?

• Free entry and exit

• Perfect information

• No long-run economic profit

• Government price controls

Multiple Choice

In the short run, what happens to the number of firms in a perfectly competitive market?

• It increases

• It decreases

• It remains fixed

• It fluctuates randomly

Multiple Choice

At what price and quantity does the new long run equilibrium occur after new firms have entered the market?

• $2 and 10 units

• $3 and 15 units

• $4 and 20 units

• $5 and 25 units

Multiple Select

Which of the following statements about the long run industry supply curve in perfect competition are correct?

• Entry of new firms increases supply

• Output rises and price drops as supply increases

• Firms continue to enter until no profit is made

• Market price always remains above the break-even price

Dropdown

The long run is always​

Select answer

than the short run.

Match

Match the following terms.

• any factors that make it difficult for new firms to enter a market

• market structure that does not meet the conditions of perfect competition

• a product that is the same no matter who produces it

• a market structure in which a large number of firms all produce the same product

• The sum of all individual supply curves in a market.

barriers to entry

imperfect competition

commodity

perfect competition

industry supply curve

• barriers to entry

• imperfect competition

• commodity

• perfect competition

• industry supply curve