Economics Chapter 3 Exam
Terms in this set (22)
Which of the following is not a condition for perfect competition?
All firms are price makers.
In perfectly competitive markets, each firm sees the demand for its output as:
a horizontal line.
In perfect competition, the demand for each firm's output at the
equilibrium price is such that the firm
A. will lose all sales if it raises price alone.
B. will be worse off lowering price than it will be simply maintaining its price at the current equilibrium level.
C. will be able to sell the quantity it wishes to sell at the current equilibrium price.
D. all of the above
D. all of the above
In perfect competition, which of the following is always true?
p = mr.
"Normal profits" exist when economic profits are
If the price of the output is $6.00, the profit maximizing output level for a purely competitive firm is
Which of the following is NOT a barrier to entry?
diseconomies of scale
exists in a market with a single seller of a good that has no close substitutes.
A profit-maximizing monopolist will always produce the level of output at which
For a monopoly earning economic losses, the demand curve
is below the average total cost curve at every level of output.
The demand curve of a monopolist is
downward sloping and above the marginal revenue curve.
The market-demand curve for a perfectly competitive market is:
If a perfectly competitive firm is producing an output where price is greater than MC, the firm:
can increase profits by increasing output
The demand curve for a perfectly competitive firm is:
The price of a good multiplied by the quantity sold equals:
Monopoly is a market structure where:
one firm makes up the entire market
Profit per unit is equal to:
TR-TC / (P-ATC)
If marginal cost is greater than price, a perfectly competitive firm will increase profit by:
A perfectly competitive firm maximizes profits where:
In a purely competitive industry, each firm:
can easily enter or exit the industry
A purely competitive firm's output is currently such that its marginal cost is $4 and marginal revenue is $5. Assuming profit maximization, the firm should:
leave price unchanged and raise output.
The MR = MC profit maximization rule applies:
to firms in all types of industries.
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