Question 1

In long-run equilibrium, profits in a perfectly competitive industry equal:

Accepted Answer

A)  zero.
B)  the risk-adjusted cost of capital.
C)  abnormal profits.
D)  fixed and variable costs.E) A) and B)
F) None of the above

Question 2

For a firm in a perfectly competitive market equilibrium:

Accepted Answer

A)  MR 
B)  AR = MC.
C)  AR > AC.
D)  AR > MR.E) B) and D)
F) None of the above

Question 3

In the market for personal computers, a viable potential entrant is:

Accepted Answer

A)  Intel Corp.
B)  Microsoft Corp.
C)  Dell, Inc.
D)  Hewlett-Packard Co.E) A) and C)
F) A) and D)

Question 4

In competitive markets, the marginal-cost (MC)  curve is:

Accepted Answer

A)  the firm's short-run supply curve.
B)  falling so long as ATC 
C)  rising so long as ATC 
D)  U-shaped.E) All of the above
F) B) and D) A

Question 5

Perfect competition is a market structure characterized by:

Accepted Answer

A)  product quality differences among large and small firms.
B)  free entry and exit.Firms are not restricted from entering or leaving the industry.
C)  product quality information that is not known by all buyers and all sellers.
D)  ruthless price competition that keeps P < AR.E) All of the above
F) C) and D) B

Question 6

In competitive markets, a normal profit equilibrium is always achieved when:

Accepted Answer

A)  MR = MC.
B)  AR = AC.
C)  AR = AC and MC 
D)  none of these.E) B) and D)
F) A) and B) D

Question 7

Legal rights such as patents and local, state, or federal licenses can present formidable:

Accepted Answer

A)  barriers to entry.
B)  barriers to mobility.
C)  barriers to exit.
D)  none of these.E) A) and B)
F) All of the above

Question 8

For a firm in a perfectly competitive market equilibrium:

Accepted Answer

A)  MC must be rising.
B)  MC must be falling.
C)  MC 
D)  MC < AVC.E) C) and D)
F) A) and B)

Question 9

A market:

Accepted Answer

A)  consists of all firms and individuals willing and able to buy or sell a particular product at a given time and place.
B)  is confined to individuals and firms currently engaged in buying and selling a particular product.
C)  describes the competitive environment in the market for any good or service.
D)  is limited to individuals or firms posing a sufficiently credible threat of market entry to affect the price/output decisions of incumbent firms.E) A) and B)
F) A) and C)

Question 10

The level of competition in a given market tends to fall if:

Accepted Answer

A)  the minimum efficient scale of firms decreases.
B)  the number of substitutes decreases.
C)  import quotas are relaxed.
D)  the number of potential entrants rises.E) A) and B)
F) A) and C)

Exam 10: Competitive Markets

In long-run equilibrium, profits in a perfectly competitive industry equal:

Correct Answer
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For a firm in a perfectly competitive market equilibrium:

Correct Answer
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In the market for personal computers, a viable potential entrant is:

Correct Answer
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In competitive markets, the marginal-cost (MC) curve is:

Correct Answer
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A

Perfect competition is a market structure characterized by:

Correct Answer
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B

In competitive markets, a normal profit equilibrium is always achieved when:

Correct Answer
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D

Legal rights such as patents and local, state, or federal licenses can present formidable:

Correct Answer
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For a firm in a perfectly competitive market equilibrium:

Correct Answer
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A market:

Correct Answer
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The level of competition in a given market tends to fall if:

Correct Answer
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Exam 10: Competitive Markets

In long-run equilibrium, profits in a perfectly competitive industry equal:

Correct AnswerverifiedShow Answer

For a firm in a perfectly competitive market equilibrium:

Correct AnswerverifiedShow Answer

In the market for personal computers, a viable potential entrant is:

Correct AnswerverifiedShow Answer

In competitive markets, the marginal-cost (MC) curve is:

Correct AnswerverifiedA

Perfect competition is a market structure characterized by:

Correct AnswerverifiedB

In competitive markets, a normal profit equilibrium is always achieved when:

Correct AnswerverifiedD

Legal rights such as patents and local, state, or federal licenses can present formidable:

Correct AnswerverifiedShow Answer

For a firm in a perfectly competitive market equilibrium:

Correct AnswerverifiedShow Answer

A market:

Correct AnswerverifiedShow Answer

The level of competition in a given market tends to fall if:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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A

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B

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D

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Correct Answer
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