Principles of Microeconomics - Perfect Competition Quiz
Test your understanding of perfect competition in microeconomics. Explore market structures, equilibrium conditions, and firm behavior.
#1
In perfect competition, what is the number of firms?
#2
What is a characteristic feature of a perfectly competitive market?
Product differentiation
Control over price
Barriers to entry
Homogeneous products
#3
What is the shape of the demand curve for a perfectly competitive firm?
Horizontal
Vertical
Upward-sloping
Downward-sloping
#4
What is the long-run equilibrium condition for a perfectly competitive firm?
Profit maximization
Loss minimization
Marginal cost equals marginal revenue
Marginal cost equals average total cost
#5
What is the profit-maximizing rule for a perfectly competitive firm in the short run?
Produce where marginal cost equals marginal revenue
Produce where marginal cost equals average total cost
Produce where marginal cost is lowest
Produce where marginal revenue is highest
#6
Which of the following is a characteristic of a perfectly competitive market in the short run?
Economic profit always exists
Firms can freely enter and exit the market
Firms produce where marginal cost exceeds marginal revenue
There is no competition among firms
#7
What happens to the market price in the long run in a perfectly competitive market?
It remains constant
It decreases
It increases
It fluctuates randomly
#8
What is the shutdown condition for a perfectly competitive firm in the short run?
When average variable cost equals price
When average total cost exceeds price
When marginal cost exceeds price
When total revenue equals total cost
#9
Which of the following is not a characteristic of perfect competition?
Many buyers and sellers
Homogeneous products
Low barriers to entry
Control over price by firms
#10
Which of the following is true about a firm in perfect competition in the long run?
Firms can earn economic profit in the long run
Firms can operate at a loss in the long run
Firms can produce beyond the point of profit maximization
Firms can earn supernormal profits indefinitely
#11
What is the relationship between marginal revenue and price for a perfectly competitive firm?
Marginal revenue equals price
Marginal revenue is greater than price
Marginal revenue is less than price
Marginal revenue fluctuates independently of price
#12
What is allocative efficiency in perfect competition?
Producing at the lowest possible cost
Producing at the point where marginal cost equals marginal revenue
Maximizing economic profit
Maximizing total revenue
#13
Which of the following is true about the demand curve for a perfectly competitive firm?
It is perfectly elastic
It is upward-sloping
It is downward-sloping
It is perfectly inelastic
#14
What is the primary reason for firms to enter a perfectly competitive market?
To maximize economic profit
To minimize losses
To increase barriers to entry
To exploit market power
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