#1
In perfect competition, how many firms are there in the market?
One dominant firm
A few large firms
Many small firms
Two to three firms
#2
What is a characteristic feature of perfect competition?
Product differentiation
Homogeneous products
Monopolistic control
Barrier to entry
#3
What is the shape of the demand curve for a firm in perfect competition?
Upward sloping
Horizontal
Downward sloping
Vertical
#4
Which of the following is a characteristic of perfect competition?
High barriers to entry
Price control by firms
Low product homogeneity
Free entry and exit
#5
Which of the following is true for a firm in perfect competition in the long run?
Economic profits are always positive
Price equals marginal cost
There are no fixed costs
The firm produces at the minimum of average total cost
#6
What happens to economic profits in the long run in perfect competition?
They remain constant
They increase indefinitely
They decrease to zero
They become negative
#7
What is the condition for allocative efficiency in perfect competition?
P = MC
P > MC
P < MC
P = ATC
#8
What is the profit-maximizing condition for a firm in perfect competition in the short run?
MR = MC
P = MC
P = ATC
MC = ATC
#9
What is the relationship between marginal revenue and price for a firm in perfect competition?
MR > P
MR = P
MR < P
MR is not defined
#10
Which of the following is a characteristic of perfect competition in the long run?
Supernormal profits
Product differentiation
Zero economic profits
High barriers to entry
#11
Which of the following is not a barrier to entry in perfect competition?
Economies of scale
Product differentiation
Legal restrictions
Control over essential inputs
#12
Which of the following is a short-run supply curve for a firm in perfect competition?
Marginal cost curve above average variable cost
Marginal cost curve above average total cost
Marginal cost curve above average fixed cost
Marginal cost curve above average marginal cost
#13
What is the shutdown condition for a firm in perfect competition?
P < AVC
P > ATC
P < MC
P < MR
#14
Which of the following is a characteristic of a firm in long-run equilibrium in perfect competition?
Positive economic profits
Price exceeds average variable cost
Price equals marginal cost
Price equals minimum average total cost
#15
In the long run, what happens to a firm in perfect competition if it is making economic losses?
It exits the market
It increases production
It lowers prices
It maintains status quo