Quiz 7 - 1. Pure Competition is created by a large number...

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1. Pure Competition is created by a large number of buyers and sellers, each acting in their own best economic interest. 2. Consider Figure 7.1 . .. for the individual producer any decrease in price below the market price is not logical (results in less revenue). ( True ) 3. Economic costs include a(n) normal profit. 4. Figure 7.4. Purely competitive model of cost, revenue, and quantity supplied. Given a Price of P3, this firm in a purely competitive industry should produce Q3 with a minimum loss. 5. Productive efficiency means that the maximum output is produced is pure competition from a minimum input. ( True ) 6. To find the maximum profit for a firm in purely competitive conditions, the total revenue approach simply finds total revenue (TR) (price x quantity at every output) and subtracts Total Cost 7. Consider Figure 7.1 . .. for the individual producer selling at a price less than the market price would result in more units sold and, therefore, a major increase in revenue ( False ) 8. Given a Price of P5, this firm in a purely competitive industry should produce Q5 with an economic profit. 9. Pure competition is efficient in production, but not in allocation. ( False ) 10. Pure competition is a unique market structure providing output at the lowest cost over the long run. 11. Economic profit is a profit greater than the normal profit which includes payment for all explicit and implicit costs. 12. Pure competition -- A large number of buyers and sellers in the market, none of whom can individually affect the price of the product or service being bought or sold. 13. Given a Price of P1, this firm in a purely competitive industry should shut down to minimize the loss at the fixed cost level. 14. Allocative efficiency means that the maximum output is produced is pure competition from a minimum input. ( False ) 15. Consider Figure 7.1 . .. for the individual producer any increase in price above the market price will result in a reduced number of units sold, but still an adequate sales volume to stay
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Quiz 7 - 1. Pure Competition is created by a large number...

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