Because perfectly competitive firms are price takers, a permanent increase in the market demand does not change the price of the product in either the short run or long run. O A. True OB. False
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- Firms ill a perfectly competitive market are said to be price takers that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?In a perfectly competitive market, when are economic profits possible? O Long-run O Economic profits are always zero, firms earn normal profit O Any time, it depends on the indivual firm O Short runIn perfect competition, what is the relationship between the demand for the firm's output and the market demand? In a perfectly competitive market, the market demand is O A. perfectly elastic; perfectly elastic O B. shown by a downward-sloping curve; perfectly elastic O C. shown by a downward-sloping curve; shown by a downward-sloping curve O D. perfectly elastic; shown by a downward-sloping curve and the demand faced by the individual firm is C
- Suppose that bicycles are produced by a perfectly competitive, constant-cost industryWhich of the following will have a larger effect the long-run price of bicycles: a government program to advertise the health benefits of bicyclingor (2) a government program increases the demand for steel, an input in the manufacture of bicycles that is produced in an increasing cost industry ? O. Option 1: shifts the demand curve out and increases the price. O. Option 2: shifts the supply curve up and increases the price O. Option 2: it shifts the demand curve up and increases the quantity. O. Option 2: shifts the supply curve up and increases the quantity.A firm in a perfectly competitive market can O choose the quantity they will produce and the price at which they will sell O choose the quantity they will produce, but not the price at which they will sell O choose the price at which they will sell, but not the quantity will produce choose neither the price at which they will sell nor the quantity they will produceIf MR (marginal revenue) is less than MC (marginal cost), then the firm sould O a. decrease production O b. increase production O c. keep the production level constant O d. keep the prices constant
- The graph shows a perfectly competitive market that was in a long-run equilibrium on demand curve Do, Due to a permanent change in demand to D, the price in the market will causing existing firms to which means that the market. O A. increase; earn a smaller economic profit; new firms will enter O B. decrease; earn a larger economic profit; new firms will enter OC. decrease; incur an economic loss; some firms will exit D. increase; earn a larger economic profit; some firms will exit O E. decrease; earn a smaller economic profit; new firms will enterWheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marqinal revenue to maximizing level of output to and their profit- O a. decrease; increase O b. decrease; decrease O c. increase; increase d. increase: decreaseA perfectly competitive firm is breaking even. In the short run it should In the long run it should O a. shut down; expand O b. produce where MC = MR; leave the industry Oc produce where MC = MR; keep the same production level O d. shut down: exit the industry Corn is produced in a perfectly competitive market. The demand for ethanol decreases. This will cause the individual corn farmer's marginal revenue to maximizing level of output to and their profit- Oa. decrease; increase Ob. increase; increase O c. increase: decrease O d. decrease; decrease
- In perfect competition, a firm maximizes profit in the short run by deciding Select one: O a. whether or not to enter a market O b. how much output to produce O c. what price to charge O d. how much capital to useull touch LTE 10:08 PM O O 37% O A docs.google.com What is the relationship between a perfectly competitive firm's marginal cost curve and its short-run supply curve? * The marginal cost curve of a perfectly competitive firm is the firm's short-run supply curve at the point where price is less than average variable cost. The marginal cost curve of a perfectly competitive firm is the firm's short-run supply curve at the point where price is equal to or greater than average variable cost. The marginal cost curve of a perfectly competitive firm is the firm's short-run supply curve at all points. The two are unrelated Page 4 of 5 Вack NextMicrosoft is the only business that sells Computer Operation System in the world. Assuming that Microsoft is maximizing its profit, which of the following statements is true? Select one : O a. Microsoft prices will be less than marginal cost. O b. Microsott prices will equal marginal cost. O c. Microsoft prices wil be a function of supply and demand and will therefore oscillate around marginal costs. O d. Microsoft prices will be higher than marginal cost.