What accommodates for the adjustment of firms from the short run to the long run?

no barriers to enter, no barriers to exit

The break-even point is defined as occurring at an output rate at which

total revenue equals total opportunity cost

As firms leave an industry, the economic loss of each remaining firm

decreases and the price of the product rises

Total economic profit is

total revenue minus total opportunity cost

By producing less, a firm can reduce

its variable costs but not its fixed costs.

In the long run, fixed costs are

zero and variable costs are positive

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Perfect Competition

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Questions about perfect competition for #APEcon

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Answers

1
What accommodates for the adjustment of firms from the short run to the long run?
no barriers to enter
no barriers to exit
zero economic profit
large number of sellers
2
The break-even point is defined as occurring at an output rate at which
total revenue equals total opportunity cost
economic profit is maximized
total cost is minimized
marginal revenue equals marginal cost
3
Normal cost equals
TC-TR=0
TC-TFR=0
Q/P=0
TVC-TFC=0
4
P = minimum___
AC
ATC
AVC
AFC
5
As firms leave an industry, the economic loss of each remaining firm
increases and the price of the product falls
decreases and the price of the product rises
increases and the price of the product rises
decreases and the price of the product falls
6
Total economic profit is
total revenue minus total opportunity cost
marginal revenue minus marginal cost
total revenue divided by total cost
marginal revenue divided by marginal cost
7
The costs incurred even when no output is produced are called
marginal costs
fixed costs
external costs
variable costs
8
In the long run, a perfectly competitive firm can
earn an economic profit
earn all of the above
incur an economoic loss
earn a normal profit
9
Firms maximize their profits by producing a level of output at which...
MC=AFC
MR=AVC
P=ATC
MC=MR
10
The shutdown point occurs at the level of output for which the ________ is at its minimum
total cost
average variable cost
marginal cost
average fixed cost
11
By producing less, a firm can reduce
its fixed costs but not its variable costs.
its fixed costs and its variable costs.
neither its variable costs nor its fixed costs.
its variable costs but not its fixed costs.
12
Demand in perfect competition is
perfectly inelastic
elastic
inelastic
perfectly elastic
13
P=MC is what type of efficiency?
Perfect efficiency
productive efficiency
Economic efficiency
Allocatively efficiency
14
In the short run, a perfectly competitive firm can
earn a normal profit.
All of the above
earn an economic profit.
incur an economic loss.
15
At what price should a firm shut down?
P>AVC
P<AVC
16
Example of perfect competition
stock market
auto industry
global credit card issuers
small retailers
17
In the long run, fixed costs are
positive and variable costs are positive
zero and variable costs are positive
positive and variable costs are zero
zero and variable costs are zero.
18
A perfectly competitive firm is definitely earning an economic profit when
P > AVC
MR < MC
P > ATC
P < ATC
19
True or False? The firm is the price maker.
False
True
20
The short-run supply curve for a perfectly competitive firm is its marginal cost curve
everywhere
below its shutdown point
above its shutdown point
above the horizontal axis

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