Question

1. Because a perfectly competitive firm will not charge more or less than the market price,...

1. Because a perfectly competitive firm will not charge more or less than the market price, that firm’s demand curve is ______.

a.upward sloping

b.vertical

c.horizontal

d.downward sloping

2. In a perfectly competitive market, a firm's price is determined by the _____.

a.average total cost

b.market supply and demand

c.individual firm's marginal costs

d.owner's decision

3.______ revenue is the revenue that the firm receives from the sale of all of its products.

a.Marginal

b.Total

c.Average

d.Percentage

4. ______ revenue equals total revenue divided by the number of units of the product sold.

a.Marginal

b.Average

c.Total

d.Percentage

5. In the three-step method, what is accomplished in step 1?

a.finding the market price

b.finding the total cost

c.finding the profit-maximizing output level

d.finding the total revenue

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Homework Answers

Answer #1

1- (C)

A perfectly competitive firm has horizontal demand curve because a perfectly competitive firm is a price taker.

Ans.2- (B)

Equilibrium price is determined by market demand and supply which is then used by all the firms.

Ans.3- Total revenue is the revenue that the firm receives from the sale of all of its products.

Ans.4- Marginal revenue equals total revenue divided by the number of units of the product . It is the additional revenue received from selling an additional unit of the product.

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