To maximize profit, a perfectly competitive firm should produce up to the output level where:
MR = MC
P = MR
P = MC
1and 3 are correct
Firms in perfectly competitive industries may be characterised as
Price Creators
Price Makers
Price Takers
Price Setters
Slope of supply curve is :
Negative
Positive
Both positive and negative
Parallel
Neither increase nor decrease
If demand increases at faster rate than the supply equilibrium price will
Increase
Decrease
Constant
In the long run, a profit , maximizing , perfectly competitive firm will earn:
A normal rate of return
Positive economic profit
Negative economic profit
Accounting profit that is greater than economic profit
