Learning Activity Unit ${?}^{-1}8$

Nam $$ in

$0$

o

$0$

In the graph a $q,$

A$)$ is pursuing a profit maximizing position if it produces at $0$ c $.$

B$)$ is breaking even if it produces at either Oa or Od $.$

C$)$ is making no economic profit if it produces at $0$ c $.$

D$)$ should shut down at any output less than Ob $.$

In the graph above we can be sure that the shutdown point of the firm is at

A$)$ the output $0b.$

B$)$

the output Oa $.$

C$)$ a point to the left of $Ob.$

D$)$

a point to the left of Oa$.$

E$)$ a point that cannot be narrowed down to the options above because the AVC is not

known.

the four conditions for perfect competition, are best illustrated by the BC co

Which two of the

farmers?

A$)$ standardized product: price taker

B$)$ standardized product: perfect information

C$)$ mobile factors of production: price taker

D$)$ perfect information: mobile factors of production

E$)$ price taker: perfect information

Sellers in perfect competition are:

A$.$ Price maker

B$.$ Price taker

C$.$ Wealthy

D$.$ Poor

How is the demand curve in a perfectly competitive market?

A$.$ The demand curve is a horizontal line at the market price.

B$.$ The demand curve is a vertical line at the market price.

C$.$ The demand curve is flat. D$.$ The demand curve cannot be calculated.

How can perfect competition maximize profit?

A$.$ Firms must set marginal revenue equal to marginal cost $($MR$-$MC$).$

B$.$ All the firms should increase the prices of the products.

C$.$ Sellers should create a scarcity of goods in the market.

D$.$ Buyers should buy the products at a lower price.

As firms leave an industry because they are incurring an economic loss, the price of the good and the economic loss of the remaining firms

A$)$ rises; decreases

B$)$ rises; increases

C$)$ falls; decreases

D$)$ falls; increases

Perfect competition is an industry with

A$)$ many firms producing goods that differ somewhat.

B$)$ many firms producing identical goods.

C$)$ a few firms producing identical goods.

D$)$ a few firms producing goods that differ somewhat in quality.

In perfect competition,

A$)$ all firms in the market sell their product at the same price.

B$)$ there are significant restrictions on entry.

C$)$ each firm can influence the price of the good.

D$)$ there are few buyers

If Steve's Apple Orchard, Inc. is a perfectly competitive firm, the demand for Steve's appli

A$)$ elasticity equal to the price of apples.

B$)$ infinite elasticity.

C$)$ unitary elasticity.

D$)$ zero elasticity.