Q37. Which of the following is NOT a characteristic of a perfectly competitivemarket?
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Q37. Which of the following is NOT a characteristic of a perfectly competitive​ market?A.B.C.D.

substantial barriers to entry

a large number of firms in a market

an individual firm having no control over price

selling a standardized product

Q38. Consumers do not have a strong preference for the output of one seller over that of another in a perfectly competitive market​ because:

A.

there are no barriers to entry.

B.

the firms sell a standardized product.

C.

an individual firm has control over price.

D.

there a large number of firms in the market.


Q39. Who are the price takers in a perfectly competitive​ market?

A.

the buyers

B.

neither the buyers nor the sellers

C.

the sellers

D.

both the buyers and the sellers


Q40. Firms in a perfectly competitive​ market:

A.

sell homogeneous products.

B.

usually have large advertising budgets.

C.

try to attract customers away from their competitors.

D.

sell a differentiated product.


Q41. A perfectly competitive firm​ can:

A.

collude with its competitors to set prices.

B.

sell as much as it can produce at the market price.

C.

prevent entry of other firms into their market.

D.

affect the market price for its good.


Q42. In which of the following market structures can you find differentiated​ products?

A.

monopoly

B.

oligopoly

C.

perfect competition

D.

monopolistic competition and oligopoly


Q43. If the demand curve faced by a firm is​ horizontal, then the firm is​ ________ and a​ ________.

A.

perfectly​ competitive; price maker

B.

a​ monopoly; price taker

C.

perfectly​ competitive; price taker

D.

​monopoly; price maker


Q44. Recall the Application called​ "Wireless Women in​ Pakistan." What makes the wireless telephone market in Pakistan perfectly​ competitive?

A.

any entrepreneur who invests​ $310 can enter the market.

B.

wireless phone calls are a standardized product.

C.

there are many buyers and many sellers.

D.

all of the above are correct.


Q45. You sell your good in a perfectly competitive market where the market price is​ $33.00. When you sell 100 units your total revenue is​ $3,300. When you sell 101​ units:

A.

total revenue increases by less than​ $33.

B.

total revenue increases by more than​ $33.

C.

total revenue increases by exactly​ $33.

D.

total revenue may increase or decrease.


Q46. Marginal revenue is equal to price for a perfectly competitive firm​ because:

A.

firms need to lower price to increase the quantity sold.

B.

total revenue increases by less than the price of the good when an additional unit is sold.

C.

firms can increase price and still increase the quantity sold.

D.

total revenue increases by the price of the good when an additional unit is sold.


Q47. If a firm suffers an economic​ loss, its:

A.

price is less than its marginal cost.

B.

price is less than its average total cost.

C.

price is less than its marginal revenue.

D.

none of the above


Q48. ​Kevin's Golf−a−Rama sells golf balls in a perfectly competitive market. At its current level of golf ball​ production, Kevin has marginal costs equal to​ $1, and AVC is rising. If the market price of golf balls is​ $2, Kevin​ should:

A.

shut down and produce no golf balls.

B.

decrease the level of golf ball production.

C.

increase the production of golf balls.

D.

continue producing the current level of production.


Q49. Kevin's Golf−a−Rama sells golf balls in a perfectly competitive market. At its current level of golf ball​ production, Kevin has marginal costs equal to​ $2. If the market price of golf balls is​ $1, Kevin​ should:

A.

increase the production of golf balls.

B.

continue producing the current level of production.

C.

raise the price of its golf balls.

D.

decrease the level of golf ball production.


Q52. If the price a firm charges in a perfectly competitive industry is less than average total​ cost:

A.

the firm is earning zero economic profit.

B.

the firm is earning positive economic profit.

C.

the firm is earning negative economic profit.

D.

it is not possible to determine anything about profits.

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