Perfectly competitive firms are small relative to the size of the market. All of the above are correct. sell homogeneous products. are price takers.
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- In a perfectly competitive market all producers sellWhich of the following is not a characteristic of a perfectly competitive market? O Goods offered for sale are largely the same. O Firms are price takers. O There are many sellers in the market. O Firms have difficulty entering the market.Consider an individual firm operating in a perfectly competitive market. Suppose there is an increase in industry supply caused by new firms entering the market. As a result, an individual firm that is currently earning positive profits will see its profits a. impossible to determine. b.increase. c.decrease. d.not change. Consider a perfectly competitive market. Suppose you observe that there aren't any new firms entering the industry, and the current firms are not exiting the industry. You conclude that firms in the market are a.suffering an economic loss. b.earning an accounting profit. c.breaking even. d.earning an economic profit.
- In a perfectly competitive market, many firms sell an identical product. True O FalseIn the short run, if a perfectly competitive firm chooses to produce, then its profits are maximized by producing the quantity of output where marginal cost equals marginal revenue. True FalseUnder what conditions will a competitive firm continue to grow in size? O Until it achieves minimum efficient scale. O Until it is just able to cover its variable costs. As long as other firms do. Until it makes an economic profit. O Until diminishing returns set in.
- Which of the following is true about firms exiting a perfectly competitive market? Select the correct answer below: O The price where firms exit the market shows the price where the firm would lack enough revenue to cover its variable costs. Firms are only concerned with what quantity to produce and will exit otherwise, even if they are not experiencing losses. Exiting the market occurs in response to a sustained pattern of losses. Exiting the market occurs in response to increased industry profits.Consider the following figure for a perfectly competitive firm: $ per Unit of Output n h hk n Quantity The profit-maximizing quantity for the firm is: e C k a MC zero, as the business would suffer a loss. P AC AVCA perfectly competitive firm will maximize its profit when marginal revenue is greater than marginal cost. True or False?
- In a perfectly competitive industry we expect long-run equilibrium price to equal [Select] and long-run economic profits to [Select] VA firm operating under perfectly competitive market experience normal profit whenDetermine a perfectly competitive firm’s profit-maximizing output level and profit in the short run.