question
A firm characterized as a price taker
answer
has no control over the price it pays, or receives, in the market.
question
what is NOT a characteristic of perfect competition
answer
Product differentiation
question
Which of the following is the closest example of a perfectly competitive market?
answer
The market for bread
question
Which characteristics of competitive markets is mainly responsible for firms making zero economic profits in the long run?
answer
Easy entry into and exit from the market
question
Profit maximization occurs when
answer
a firm expands output until marginal revenue is equal to marginal cost.
question
GRAPH
answer
SEE CANVAS #6
question
Where is a perfectly competitive firms break-even output level?
answer
At the minimum point of the average total cost curve
question
A firm will shut down in the short run
answer
when price is below average variable costs at all levels of output.
question
A firms short run supply curve is equal to the firms
answer
Marginal cost curve above minimum average variable cost
question
In the long run, if a firm is making a loss, it will
answer
stop producing and exit the market
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