question
Which idea is inconsistent with perfect competition?
answer
product differentiation
question
It is a "given" that an individual firm selling in a perfectly competitive market will take the market price because
answer
each producer supplies a negligible fraction of total market
question
Clara produces and sells tomatoes in a perfectly competitive market. This implies that Clara's marginal revenue generated from selling an additional unit of tomatoes is always equal to
answer
price
question
If a firm operating in a perfectly competitive industry is confronted with an equilibrium market price of $5, its marginal revenue
answer
will also be $5
question
A perfectly competitive form trying to maximize profits in the short run will expand output
answer
as long as marginal revenue is greater than marginal cost
question
A perfectly competitive firm's output is currently such that its marginal revenue is $5 and marginal cost is $4. Assuming profit maximization, the firm should
answer
leave price unchanged and increase output
question
A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 1000 units is $2.50. The minimum possible average variable cost is $2. The market price of the product is $2.50. To maximize profits, the firm should
answer
continue producing 1000 units
question
A firm sells a product in a purely competitive market. The marginal cost of the product at the current output level of 800 units is $3.50. The minimum possible average variable cost is $3. The market price of the product is $4. To maximize products, the firm should
answer
increase production to more than 800 units
question
A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 500 units is $`.50. The minimum possible average variable cost is $1. The market price of the product is $1.25. To maximize profits, the firm should
answer
decrease production to less than 500 units
question
T-Shirt Enterprises is operating in a perfectly competitive market. It is producing 3000 t-shirts and selling them for $10 each. At this level of output, the average total cost is $10.50 and the average variable cost is $10.20. Based on these data, the firm should
answer
shut down in the short run
question
The short-run supply curve for a perfectly competitive firm is the
answer
segment of the MC curve lying at and above the AVC curve
question
The short-run supply curve of a perfectly competitive firm is based primarily on its
answer
MC curve
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