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Perfect Competition
Perfect Competition
15 terms
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AP Micro review game
Flashcards
15 cards
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Practice quiz
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Questions
15
Answers
1
For a perfectly competitive industry, if demand were to decrease what will happen?
Supply is government propaganda used to spread socialism
supply would not change
supply would decrease
Supply would increase
2
If MR=MC at a quantity of 50, price of 20, ATC of 25 and AVC of 21, what will the profit be?
$50.00
Shutdown
$2500.00
$250.00
3
Perfect competition is an industry with
Many firms producing goods that differ somewhat
Many firms producing identical goods
Few Firms producing identical goods
A few firms producing goods that differ somewhat in quality
4
The perfectly competitive firm will shut down if price falls below
P1
P2
P3
P4
5
In the table, the price of the product is
$150
$30
$180
$147
6
The price elasticity of demand for any particular perfectly competitive firm's output is
1
equal to zero
less than 1
infinite
7
According to the graph, will this firm experience a profit, loss, or shutdown?
Shutdown
Loss
No Idea
Profit
8
The firm's supply curve is the curved line from
point b to point f and stopping at point f
point a to point c and stopping at point c
point b to point d and continuing on past point d along MC
point c to point e and continuing on past point e along ATC
9
How do you know where to produce in a perfectly competitive firm? You need to find where...
MR=MC
TR=MR
MR<MC
MR>MC
10
If MR=MC at a quantity of 10, a price of 25, ATC of 17, what will the firm's loss or profit be?
$8.00
$80.00
$25.00
$250.00
11
If the firm does not shut down, the least amount of output that it will produce is
8 units
5 units
less than 5 units
10 units
12
For a perfectly competitive industry, if demand for a good were to increase, what will happen
supply will diminish
supply will remain unchanged
supply will increase
supply will decrease
13
A perfectly competitive firm's demand curve is best described as
Perfectly Elastic
Perfectly Inelastic
Inelastic
Relatively Elastic
14
In perfect competition, restrictions on entry into an industry
apply to both capital and labor
do not exist
apply to capital but not to labor
apply to labor but not to capital
15
If the price rises from P3 to P4 then output will increase by
3 units
2 units
0 units
1 unit
