Unit 2.11 Market power - Perfect competition(HL)

What is a characteristic of perfect competition?

• Few large buyers and sellers

• Monopolistic control over price

• Limited competition

• Large number of small buyers and sellers

In perfect competition, what type of product do firms sell?

• Homogenous products

• Unique products

• Luxury products

• Limited products

What is assumed about knowledge in a perfectly competitive market?

• Limited knowledge

• Perfect knowledge

• Biased knowledge

• No knowledge

What is the assumption regarding barriers to entry or exit in perfect competition?

• Moderate barriers to entry or exit

• High barriers to entry or exit

• Variable barriers to entry or exit

• No barriers to entry or exit

What determines the market price and output in perfect competition?

• Monopolistic control

• Random fluctuations

• Demand and supply

• Government regulations

In perfect competition, what type of demand curve do firms face?

• Downward sloping

• Perfectly inelastic

• Perfectly elastic

• Upward sloping

What is the total revenue formula for a business?

• Price x quantity = total revenue

• Price - quantity = total revenue

• Price + quantity = total revenue

• Price / quantity = total revenue

What is average revenue?

• Revenue per unit of output sold

• Total revenue generated

• Total revenue received

• Revenue per unit of input

What is marginal revenue?

• Change in total revenue when one more unit is sold

• Total revenue minus costs

• Average revenue multiplied by output

• Total revenue divided by output

In perfect competition, what is the equilibrium output level for firms?

• Where marginal cost equals marginal revenue

• Where total cost is maximized

• Where marginal cost is zero

• Where average cost is minimized