#1
In a perfectly competitive market, firms are considered price ________.
leaders
followers
setters
takers
#2
What is the main characteristic of a perfectly competitive market?
High barriers to entry
Homogeneous products
Few buyers and sellers
Market power of firms
#3
In the short run, a perfectly competitive firm will continue to produce output as long as its marginal cost is ________ its marginal revenue.
greater than
equal to
less than
not related to
#4
What happens to a perfectly competitive firm in the long run if it is making economic losses?
It exits the market.
It increases production.
It reduces production.
It shuts down immediately.
#5
What is the relationship between marginal revenue and price for a perfectly competitive firm?
Marginal revenue is greater than price.
Marginal revenue is equal to price.
Marginal revenue is less than price.
Marginal revenue is not related to price.
#6
In the long run, in a perfectly competitive market, economic profits will be driven to ________.
zero
infinity
negative infinity
positive infinity
#7
In a perfectly competitive market, what happens if a firm raises its price above the market price?
It sells more units.
It sells fewer units.
It sells the same number of units.
It shuts down.
#8
What is the shape of the marginal cost curve for a perfectly competitive firm?
U-shaped
Downward sloping
Upward sloping
Constant
#9
What is a characteristic of a perfectly competitive market in terms of information?
Complete information
Limited information
No information
Asymmetric information
#10
Which of the following is a barrier to entry in a perfectly competitive market?
Economies of scale
Product differentiation
Government regulation
All of the above
#11
What is the profit-maximizing rule for a firm in a perfectly competitive market?
Produce where marginal cost equals marginal revenue.
Produce where marginal cost is greater than marginal revenue.
Produce where marginal cost is less than marginal revenue.
Produce where average cost is minimized.
#12
What is the relationship between price and marginal cost in a perfectly competitive market in the long run?
Price equals marginal cost.
Price is greater than marginal cost.
Price is less than marginal cost.
Price and marginal cost are not related.