Question

1.For a firm in a perfectly competitive market, marginal revenue for any positive level of output is

a) Greater than market price

b) Less than market price

c) The same as market price

2. Under what circumstances will a firm in a perfectly competitive industry definitely want to shut down all production in a short run setting?

a) When the market price is less than ATC

b) When the market price is less than AVC

c) WHen the market price is less than AFC

3. A perfectly competitive firm's supply curve is its

a)marginal cost curve.

b)average total cost curve.

c)average variable cost curve.

d) average fixed cost curve.

Suppose a perfectly competitive industry is in long run equilibrium. Then all but which of the following statements will be true for the firms in the industry?

a. price will equal marginal cost

b. price will equal minimum average variable cost

c. price will equal minimum average total cost

d. price will equal marginal revenue

In long run equilibrium, a monopolistically competitive firm will find that...

a. price is greater than both MC and ATC

b. Price is greater than ATC, but = to MC

c. Price is greater than MC but = to ATC

d. Price is = to MC and ATC

Firms in what market structure(s) set MR = MC to maximize profits?'

a. perfect competition

b. monopoly

c. monopolistic competition

d. all of the above

Firms in which market structure(s) are protected by "barriers to entry"?

a. perfect competition

b. monopoly

c. monopolistic competition

d. all of the above

A monopolist faces an inverse demand function given by P = 100 - 2Q. The firm's marginal cost is $20.  The firm currently is pricing at $40 and selling the quantity demanded. Its marginal revenue at this price/quantity combination is

a. is positive and above MC; the firm should lower its price and sell more

b. is positive but below MC; the firm should raise price and sell less

c. is zero; the firm should raise its price and sell less

d. is negative; the firm should raise its price and sell less

Firms in which market structure(s) generally don't find it profitable to advertise?

a. perfect competition

b. monopoly

c. monopolistic competition

d. none of the above; firms in all market structures generally find it profitable to advertise

Answer 1

1.For a firm in a perfectly competitive market, marginal revenue for any positive level of output is

c) The same as market price

2. Under what circumstances will a firm in a perfectly competitive industry definitely want to shut down all production in a short run setting?

b) When the market price is less than AVC

3. A perfectly competitive firm's supply curve is its

a)marginal cost curve.

4) Suppose a perfectly competitive industry is in long run equilibrium. Then all but which of the following statements will be true for the firms in the industry?

b. price will equal minimum average variable cost

5) In long run equilibrium, a monopolistically competitive firm will find that.

d. Price is = to MC and ATC

6) Firms in what market structure(s) set MR = MC to maximize profits?'

a. perfect competition

b. monopoly

c. monopolistic competition

d. all of the above

7)

Firms in which market structure(s) are protected by "barriers to entry"?

b. monopoly