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Econ 201 chp 11 perfectly Competitive markets Test

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3 Written Questions

2 Multiple Choice Questions

  1. • In the long-run, firms can enter/exit the market if operating at a loss or profit
    o Know how these supply shifts affect the individual firm
  2. 1. Many buyers and many firms, all of which are small relative to the overall market
    2. Products sold are identical
    3. No barriers to new firms entering (or on firms exiting)

2 True/False Questions

  1. The long-run market supply curve is a horizontal line...

          

  2. Long-run equilibrium in a perfectly competitive market• In the long-run, if there's a profit to be made, firms will enter the market
    • In the long-run, if firms are operating at a loss, they'll shut down
    • Therefore, at the long-run competitive equilibrium, all firms will be earning zero economic profits

          

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