12.1Perfectly Competitive Markets7) Perfect competition is characterized by all of the followingexceptA) heavy advertising by individual sellers.B) homogeneous products.C) sellers are price takers.D) a horizontal demand curve for individual sellers.Answer:A
8) A very large number of small sellers who sell identical products implyC
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10) The price of a seller's product in perfect competition is determined byC
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13) Suppose the equilibrium price in a perfectly competitive industry is $15 and a firm in the industry charges$21. Which of the following will happen?C
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18) In perfect competitionA)the market demand curve and the individual's demand are identical.B) the market demand curve is perfectly inelastic while demand for an individual seller's product is perfectlyelastic.C) the market demand curve is perfectly elastic while demand for an individual seller's product is perfectlyinelastic.D) the market demand curve is downward sloping while demand for an individual seller's product is perfectlyelastic.Answer:D
12.2How a Firm Maximizes Profit in a Perfectly Competitive Market1) If the market price is $25, the average revenue of selling five units isC
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2) If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
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