Economics - Perfect Competition

In a perfectly competitive industry there are...

• Many buyers and many sellers

• Many sellers only and 1/2 buyers

• Many buyers only and 1/2 sellers

• 1 firm sets the price for the others to follow

In perfect competition restrictions on entry and exit into the industry...

• do not exist

• apply to labour not to capital

• apply to labour and capital

• Capital not labour

In Perfect Competition...

• there are barriers to entry

• each firm can influence the price

• there are few buyers

• Firms in the market cannot influence the price

In perfect competition industry the Firm's break-even point occurs:

• At price level where Marginal Revenue equals Average Fixed Costs

• At price level where Marginal Revenue = AVC

• At price level where TR = TC

• At price level where MR exceeds MC

Perfectly competitive firm maximises its profits by producing the output at which MC equals...

• AVC

• MR

• ATC

• AFC

In short run a perfectly competitive firm's shut down point is the quantity and price at which the firm's total revenue falls below...

• MC

• AVC

• TC

• TFC

In the long run a firm in Perfect Competitive industry will make only normal profits because...

• few firms are in the industry

• New firms will neter and compete away the abnormal profits

• Another firm will influence the price

• the demand for product will become price inelastic

In perfectly competitive market, a company demand curve is

• perfectly elastic

• perfectly inelastic

• an imperfect market

• Elastic

In perfect competition every profit exploiting manufacturer looks at a market price identical to...

• Marginal Revenue

• Marginal cost

• Profit maximisation

• Perfectly elastic

Perfect Competition is an industry with...

• few firms producing identical goods

• many firms producing goods that differ somewhat

• a few firms producing goods that differ in quality

• many firms producing identical goods