#1
Which of the following is true regarding a perfectly competitive market?
There are many buyers and many sellers
The products are differentiated
There are significant barriers to entry
Firms have significant control over prices
#2
What does the term 'MR' stand for in perfectly competitive markets?
Marginal Revenue
Market Revenue
Minimum Revenue
Maximum Revenue
#3
Which of the following is a characteristic of a perfectly competitive market structure?
High barriers to entry
A few large firms dominate the industry
Product differentiation
Price taker behavior
#4
What is the shape of the demand curve faced by a perfectly competitive firm?
Horizontal
Vertical
Upward sloping
Downward sloping
#5
What is the characteristic feature of a perfectly competitive market regarding entry and exit?
High barriers to entry and exit
Low barriers to entry and exit
Government regulation of entry and exit
Monopolistic control over entry and exit
#6
What is the shape of the average revenue (AR) curve for a perfectly competitive firm?
Horizontal
Vertical
Upward sloping
Downward sloping
#7
In perfectly competitive markets, what is the condition for profit maximization?
MR = MC
P = MC
MR = P
P > MR
#8
What happens to a perfectly competitive firm's economic profit in the long run?
It decreases to zero
It increases indefinitely
It remains constant
It becomes negative
#9
What is the short-run supply curve of a perfectly competitive firm?
The marginal cost curve above the average variable cost curve
The marginal cost curve above the average total cost curve
The marginal revenue curve above the average total cost curve
The marginal revenue curve above the average variable cost curve
#10
In a perfectly competitive market, how does an increase in demand affect equilibrium price and quantity?
Price increases and quantity decreases
Price decreases and quantity increases
Price increases and quantity increases
Price decreases and quantity decreases
#11
What is the relationship between marginal cost (MC) and average total cost (ATC) in the short run for a perfectly competitive firm?
MC < ATC
MC = ATC
MC > ATC
MC = AFC
#12
What is the relationship between marginal revenue (MR) and price (P) for a perfectly competitive firm?
#13
Which of the following is NOT a characteristic of perfectly competitive markets?
Homogeneous products
Price setting by individual firms
Free entry and exit
Perfect information
#14
What is the long-run equilibrium condition for a perfectly competitive firm?
P = MR = MC
P = MC = AC
P = MR = AC
P = AR = AC
#15
Which of the following is true about long-run equilibrium in a perfectly competitive market?
Firms earn economic profits
Firms produce at the minimum of the average total cost curve
Firms produce where marginal cost equals marginal revenue
Firms have excess capacity
#16
What is the long-run supply curve of a perfectly competitive industry?
Horizontal at the minimum average cost
Vertical at the equilibrium price
Upward sloping
Downward sloping