Multiple Choice Questions

Profit for a perfectly competitive firm can be expressed as Profitequals=left parenthesis (P×Q)−(ATC×Q)​, where P is​ price, Q is​ output, and ATC is average total cost.
  • What conditions make a market perfectly​ competitive?
  • Which of the following is an expression of profit for a perfectly competitive​ firm?
  • How should firms in perfectly competitive markets decide how much to​ produce?
  • What is the supply curve for a perfectly competitive firm in the short​ run?
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  • Assume the market for oranges is perfectly competitive. If the demand for oranges​ increases, will the market supply additional​ oranges?
  • How should firms in perfectly competitive markets decide how much to​ produce?
  • Suppose the market for cotton is perfectly competitive and that input prices decrease as the industry expands. Characterize the​ industry's long-run supply curve.
  • The figure to the right represents the cost structure for a perfectly competitive firm with its average total cost​ (ATC) curve, average variable​ (AVC) curve, and marginal cost​ (MC) curve. Fixed costs are​ $50.00.Suppose the market price is $24.00 per unit.Characterize the firm's profit.If the firm produces ourput, then it will
Perfectly competitive firms should produce the quantity where the difference between total revenue and total cost is as large as possible.
  • Which of the following is an expression of profit for a perfectly competitive​ firm?
  • How should firms in perfectly competitive markets decide how much to​ produce?
  • Should the firm instead shut down in the short​ run?
  • What is the supply curve for a perfectly competitive firm in the short​ run?
In the long​ run, perfect competition results in productive efficiency because firms enter and exit until they break even where price equals minimum average cost.
  • Does the market system result in allocative​ efficiency?
  • Assume the market for oranges is perfectly competitive. If the demand for oranges​ increases, will the market supply additional​ oranges?
  • Does the market system result in productive​ efficiency?
  • Should the firm instead shut down in the short​ run?
If the demand for oranges​ increases, then the market will supply additional oranges because producers seek the highest return on their investments.
  • What is the supply curve for a perfectly competitive firm in the short​ run?
  • Should the firm instead shut down in the short​ run?
  • Suppose the market for cotton is perfectly competitive and that input prices decrease as the industry expands. Characterize the​ industry's long-run supply curve.
  • Assume the market for oranges is perfectly competitive. If the demand for oranges​ increases, will the market supply additional​ oranges?
The cotton​ industry's long-run supply curve will be downward sloping because the​ long-run average cost of production will be decreasing.
  • Assume the market for oranges is perfectly competitive. If the demand for oranges​ increases, will the market supply additional​ oranges?
  • What is the supply curve for a perfectly competitive firm in the short​ run?
  • Suppose the market for cotton is perfectly competitive and that input prices decrease as the industry expands. Characterize the​ industry's long-run supply curve.
  • Should the firm instead shut down in the short​ run?
In the short​ run, the firm should continue to produce because price is greater than average variable cost.
  • Assume the market for oranges is perfectly competitive. If the demand for oranges​ increases, will the market supply additional​ oranges?
  • How should firms in perfectly competitive markets decide how much to​ produce?
  • Should the firm instead shut down in the short​ run?
  • What is the supply curve for a perfectly competitive firm in the short​ run?
A market is perfectly competitive if it has many buyers and many​ sellers, all of whom are selling identical​ products, with no barriers to new firms entering the market.
  • Which of the following is an expression of profit for a perfectly competitive​ firm?
  • How should firms in perfectly competitive markets decide how much to​ produce?
  • What is the supply curve for a perfectly competitive firm in the short​ run?
  • What conditions make a market perfectly​ competitive?
In the long​ run, perfect competition results in allocative efficiency because firms produce where price equals marginal cost.
  • Assume the market for oranges is perfectly competitive. If the demand for oranges​ increases, will the market supply additional​ oranges?
  • Should the firm instead shut down in the short​ run?
  • Does the market system result in allocative​ efficiency?
  • Does the market system result in productive​ efficiency?
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Multiple Choice Questions
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