In perfect competition :
Products are heavily differentiated
The products firms offer are very similar
A few firms dominate the market
Consumers have limited information
For a perfectly competitive firm
Total revenue is a straight line
Price is greater than marginal revenue
Price equals total revenue
Price equals total cost
Short run abnormal profits are competed away by firms leaving the industry
Short run abnormal profits are competed away by firms entering the industry
Short run abnormal profits are competed away by the government
Short run abnormal profits are competed away by greater advertising
If the price of an input _________ the cost of production rises.
Decrease
Increase
Constant
Leftward
In the long run equilibrium in perfect competition.
Price = average cost = total cost
Price = average cost = marginal cost
Price = marginal revenue = total cost
Total revenue = total variable cost
Firms in perfect competition face a
Perfectly elastic demand curve
Perfectly inelastic demand curve
Perfectly elastic supply curve
Perfectly inelastic supply curve
A profit maximising firm in perfect competition produces where ;
Total revenue is maximised
Marginal revenue equals marginal cost
Marginal revenue equals zero
Marginal revenue equals average cost
The _________ of a firm shows the level of output that the firm chooses to produce corresponding to different value of the market price.
Demand Curve
Supply Curve
Aggregate demand curve
Aggregate supply
The __________ of a good measures the responsiveness of quantity supplied to changes in the prices of the good.
Price elasticity of supply
Investment
Supply
Demand
In the __________ a firm does not produce if it earns anything less than the normal profit.
Short run
Long run
Demand curve
