Question

1. In a perfectly competitive market a firm should be increasing the output when a. marginal...

1. In a perfectly competitive market a firm should be increasing the output when

a.

marginal revenue is less than marginal cost.
b.

there are enough customers.
c.

marginal revenue is greater than marginal cost.
d.

marginal revenue is equal to marginal cost.

2. All firms operating in a perfectly competitive market produce unique goods.

a.True

b. False

3. In perfect competition marginal revenue is equal to price.

a.True

b.False

4.In perfectly competitive market the slope of marginal revenue curve is

a.

upward sloping.
b.

downward sloping.
c.

a straight line parallel to X axis.
d.

straight line parallel to the Y axis.

5.​Firms operating in a perfectly competitive market have an incentive to advertise their products since this will increase the demand for their products.

a. True

b.False

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Homework Answers

Answer #1

Q1
Answer
Option c
A profit is maximum at MR=MC, and the MR curve is horizontal sloping and MC curve upward sloping so if MR>MC then the output should be increased up to MR=MC
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Q2
Answer
false
Firms operating in the perfectly competitive market produces identical products not unique.
-------
Q3
Answer
true
the MR=P because the demand curve is horizontal and the same curve is MR curve.
------
Q 4
option c
the firms are price taker so the price is the MR, demand and AR curve for the firm and it is horizontal, so it is parallel to the x-axis

---------
Q5
False
The products are identical, and the consumer has perfect knowledge about goods so the advertisement will not affect on consumer and also cannot increase the profit of one firm as all products are same.

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