1. Which of the following is not true for a purely competitive seller?

a. MR = MC at the profit maximizing output

b. A price taker

c. P = MC at the profit maximizing output

d. Inflexible price.

2. In the short-run, a firm should:

a.Close down if the price is lower than average total cost for all output levels

b.Close down if total revenue is lower than total variable costs for all output levels

c.Close down if the normal profit is not realized at all output levels

d.Close down if total revenue is lower than total fixed costs at all output levelse.

3. The short-run supply curve of a competitive firm is its marginal cost curve

a.Above its average total cost curve

b.Above its total cost curve

c.Above its average fixed cost curve

d.Above its average variable cost curve

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