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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. This means perfectly competitive firms are price takers
    • This means the individual firm faces perfectly elastic demand
    • Be able to calculate the profit maximizing output and quantity from a table (MR = MC)
    • Know how to recognize the profit maximizing point on a graph
    o Is the firm making a profit? Operating at a loss? Breaking even?

2 True/False Questions

  1. The long-run market supply curve is a horizontal lineThis means perfectly competitive firms are price takers
    • This means the individual firm faces perfectly elastic demand
    • Be able to calculate the profit maximizing output and quantity from a table (MR = MC)
    • Know how to recognize the profit maximizing point on a graph
    o Is the firm making a profit? Operating at a loss? Breaking even?

          

  2. Break-even pointis minimum of AVC curve

          

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