Microeconomics Principles and Perfect Competition Quiz

Individual firms have no control over price in perfect competition.

All products are identical in a perfectly competitive market.

The demand curve is flat or horizontal for a single firm in perfect competition.

In the long run, price equals average total cost for firms in perfect competition.

Firms will shut down in the short run if price falls below average variable cost.

In perfect competition, marginal revenue is equal to price.

The demand curve facing a perfectly competitive firm has a slope of zero.

Perfect competition does not have barriers to entry.

In the long run, economic profit is driven to zero in perfect competition.

Allocative efficiency occurs when production is at a point where marginal cost equals price.

Positive economic profit attracts new firms to enter the market in the long run.

The demand curve facing a perfectly competitive firm is perfectly elastic in the short run.