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Econ QUIZ 7 - QUIZ 7 VERSION 1 1 The conditions for a...

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QUIZ 7 VERSION 1 1) The conditions for a perfectly competitive market include which one of the following? A) Firms can control prices. B) Firms must employ the newest technologies to remain competitive. C) Profits are zero in the short run. D) New entrants cannot threaten existing firms. E) Firms behave as price takers. 2) Under perfect competition the market demand curve is typically 3) A firm's average revenue is defined as 4) A firm in a perfectly competitive industry will maximize profits by adjusting 5) A price-taking firm in the short run should not produce A) when marginal revenue equals average total cost. B) if average revenue does not at least equal average variable cost. C) when marginal revenue equals marginal cost. D) if it is incurring a loss. E) if average revenue does not at least equal average total cost. 6) Suppose that in a perfectly competitive industry, the market price of the product is $12. Firm A is producing the output level at which average total cost equals marginal cost, both of which are $10. To maximize its profits, firm A should 7) If a perfectly competitive market is in short-run equilibrium and each firm has P > SRATC , then
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Assume the following total cost schedule for a perfectly competitive firm. Output TVC TFC 0 0 100 1 40 100 2 70 100 3 120 100 4 180 100 5 250 100 6 330 100 TABLE 1
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