#1
In a perfectly competitive market, how many firms are there?
#2
In a perfectly competitive market, what happens to the price if a firm increases its output?
The price decreases
The price remains constant
The price increases
The price becomes negative
#3
What happens to the price in a perfectly competitive market if all firms experience an increase in production costs?
The price decreases
The price increases
The price remains constant
The price becomes negative
#4
What is a key feature of product differentiation in a perfectly competitive market?
Identical products
Unique products
High entry barriers
Monopolistic power
#5
What is the primary reason for the horizontal demand curve facing a firm in a perfectly competitive market?
Perfect information
Product differentiation
Identical products
Monopoly power
#6
What is a characteristic feature of a perfectly competitive market?
Product differentiation
Price setting power
Barriers to entry
Homogeneous products
#7
In a perfectly competitive market, how does a firm maximize its profit?
By setting a higher price than competitors
By producing more output
By producing at the point where marginal cost equals marginal revenue
By reducing production to minimize costs
#8
What is a key assumption of a perfectly competitive market?
Product differentiation
Barriers to entry
Homogeneous products
Monopoly power
#9
How does a firm in a perfectly competitive market determine its output level to maximize profit in the short run?
By setting a price equal to average total cost
By producing where marginal cost equals marginal revenue
By minimizing fixed costs
By setting a price higher than competitors
#10
What is the profit-maximizing rule for a firm in a perfectly competitive market in the short run?
Produce where average total cost equals marginal cost
Produce where price equals marginal cost
Produce where marginal revenue equals marginal cost
Produce where average revenue equals marginal revenue
#11
What is the shape of the demand curve facing a firm in a perfectly competitive market?
Upward-sloping
Downward-sloping
Horizontal
Vertical
#12
In the long run, what happens to the economic profit of firms in a perfectly competitive market?
It increases
It decreases to zero
It remains constant
It becomes negative
#13
What is the entry and exit condition for firms in a perfectly competitive market in the long run?
High entry barriers
Low exit barriers
Low entry barriers and high exit barriers
Low entry barriers and low exit barriers
#14
What is the relationship between price and marginal revenue for a firm in a perfectly competitive market?
Equal
Marginal revenue is greater than price
Marginal revenue is less than price
No relationship
#15
In a perfectly competitive market, what happens to a firm's economic profit in the long run?
It increases
It remains constant
It decreases to zero
It becomes negative