Question

a) In the long run in a competitive constant-cost industry

A. A firm’s supply curve is upward sloping but the industry supply curve is perfectly elastic at the minimum of AVC.

B. firm’s supply curve is upward sloping but the industry supply curve is perfectly elastic at the minimum of ATC.

C. Both the industry and a firm’s supply curve are perfectly elastic at the minimum of ATC.

2)Which of the following is correct?

A. In a competitive market buyers will consume a good as long as the marginal benefit is less than or equal to price.

B. In a competitive market sellers will produce a good as long as marginal cost is greater than or equal to price.

C. In a competitive marginal revenue is greater than price.

D. a and b are correct

E. None of the above are correct.

D. The supply curve for a firm is perfectly elastic at the minimum of average total cost and the industry supply curve is the horizontal summation of the upward sloping sections of the MC curves (above the minimum of ATC) of firms in the industry.

E. none of the above

Answer 1