V. CHAPTERS 10 &ll MULTIPLE C1 {OICE (90%) l. A purely competitive rm: A) must earn a normal prot in the short run. B) cannot earn economic prot in the long run. C) may realize either economic prot or IOSSes in the long run. D) cannot earn economic prot in the short run. 2. The MR = MC rule can be restated for a purely competitive seller as P = MC because: A) each additional unit of output adds exactly its price to total revenue. B) the rm's average revenue curve is downsloping. C) the market demand curve is downsloping. D) the rm's marginal revenue and total revenue curves will coincide. 3. In the short run a purely competitive rm will always make an economic prot if: A) P = ATC. B) P > AVC. C) P = MC. D) P > ATC. 4. In the short run the individual competitive rm's supply curve is that segment of the: A) average variable cost curve lying below the marginal cost curve. B) marginal cost curve lying above the average variable cost curve. C) marginal revenue curve lying below the demand curve. D) marginal cost curve lying between the average total cost and average variable cost curves. 5. Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total xed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation: A) should close down in the short run. B) is maximizing its prots. C) is realizing a loss of $60. D) is realizing an economic prot of $40