Question

What is a fixed cost in a firm’s production schedule?

		Cost from an input that does not change with quantity produced.
		Cost from an input that does not change with time.
		Cost from an input that does not change with its quality.
		Cost from an input that has no substitutes in the firm’s production.

In a perfectly competitive market, firms are price takers because:

		There are many sellers, all offering the same product
		All the sellers have agreed to not change the price
		Consumers have more influence on the market than sellers
		None of the above

In a perfectly competitive market, at the given price, which of the following is not true?

		Buyers and sellers take price as a given
		Each firm can choose what quantity to sell at the given price
		The demand curve faced by an individual firm is horizontal
		Firms are unable to freely enter and exit the industry

In a perfectly competitive market, the market supply curve has a positive slope because:

		Marginal costs increase with quantity
		Marginal revenue is stagnant
		The number of sellers decrease when price increases
		Sellers are price takers

Which of these is not true of perfectly competitive markets?

		There must be many buyers and sellers
		Firms must produce a standardised product
		Firms are able to choose the price they charge
		The market must allow free entry and exit from the industry

Answer 1