WorksheetsPerfect Competition Market
Total questions: 10
Worksheet time: 11mins
In perfect competition, the marginal revenue of an individual firm
is zero
is positive but less than the price of the product
equals the price of the product
exceeds the price of the product
The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______
perfectly inelastic, perfectly elastic
downsloping, perfectly inelastic
downsloping, perfectly elastic
perfectly elastic, downsloping
A firm will expand the amount of output it produces as long as its
average total revenue exceeds its average total cost
average total revenue exceeds its average variable cost
marginal cost exceeds its marginal revenue
marginal revenue exceeds its marginal cost
In the above figure, if the price is P1, the firm will produce
nothing
where MC equals P1
where MC equals ATC
where ATC equals P1
In the figure, if the firm increases its output from Q2 to Q3, it will
reduce its marginal revenue
increase its marginal revenue
increase its profit
decrease its profit
The short-run supply curve for a perfectly competitive firm is its marginal cost curve above the minimum point on the
average variable cost curve
average fixed cost curve
demand curve
average total cost curve
In the table, the average fixed cost at 4 units of output is
$1.00
$4.50
$4.70
$4.80
In the table, the average variable cost at 2 units of output is
$1.00
$2.00
$4.00
$4.80
A perfectly elastic demand curve implies that the firm
must lower price to sell more output
can sell as much output as it chooses at the existing price
realizes an increase in total revenue which is less than product price when it sells an extra unit
is selling a differentiated (heterogeneous) product
A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating
price and average total cost
price and average fixed cost
price and marginal revenue
marginal revenue and marginal cost
