Perfect Competitive Industry Long and Short Run Supply

In a perfectly competitive industry with constant costs, the long-run supply curve will be

A. upward sloping.
B. downward slopina.
C. vertical.
D. horizontal.

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horizontal.

In perfect competition, long-run equilibrium occurs when the economic profit is?

A. positive
B. negative
C. zero
D. None of the above.

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zero

The increase in total revenue that results from selling one more unit of output is

A. marginal cost.
B. marginal revenue.
C. average revenue.
D. None of the above.

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marginal revenue.

What is the relationship between price, average revenue, and marginal revenue for a firm in a perfectly competitive market?

A. Price is equal to both average revenue and marginal revenue.
B. Price is greater than average revenue and equal to marginal revenue.
C. Price is equal to average revenue and greater than marginal revenue.
D. Price, average revenue, and marginal revenue usually all have different values.

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Price is equal to both average revenue and marginal revenue.

Long-run equilibrium in perfect competition results in

A. allocative efficiency.
B. productive efficiency.
C. Both A and B.
D. Neither A nor B.

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Both A and B.

In a perfectly competitive industry with increasing average costs, the long-run supply curve will be

A. upward sloping.
B. vertical.
C. horizontal.
D. downward sloping.

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upward sloping.

Which of the following terms best describes a state of the economy in which production reflects consumer preferences?

A. consumer equilibrium
B. socialism
C. allocative efficiency
D. productive efficiency

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allocative efficiency

Which of the following terms best describes the result of the forces of competition driving the market price to the minimum average cost of the typical firm?

A. decreasing-cost industry
B. competitive markdown
C. productive efficiency
D. allocative efficiency

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productive efficiency

A perfectly competitive firm is losing money in the short run, and its price is less than its average variable cost. In order to minimize its losses in the short run, this firm should

A. continue producing its current level of output.
B. increase its level of output.
C. shut down.
D. do none of the above.

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shut down.

If the market demand curve shifts to the right, how will a competitive firm's level of output change?

A. The firm will keep its output constant, but its profits will increase.
B. The firm will increase its output, and its profits will increase.
C. The firm will need to decrease its output and therefore suffer losses.
D. The firm will decrease its output, which will increase its profit.

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The firm will increase its output, and its profits will increase.

A buyer or seller that is unable to affect the market price is called

A. a monopoly.
B. an independent producer.
C. a price maker.
D. a price taker.

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a price taker.

the long-run supply curve of a decreasing cost industry is
the long-run supply curve of a firm under perfect competition is equal to
in the long run, a perfectly competitive market will
in the long run if the price of the goods is higher than the average cost the industry will
in the long run in perfect competition the firm will earn
in long-run equilibrium in a competitive market, firms are operating at
in the long run competitive equilibrium theory predicts that
when a perfectly competitive industry is in long-run equilibrium all firms in the industry