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Questions and Answers
Which of the following is a characteristic of perfect competition in the short run?
Which of the following is a characteristic of perfect competition in the short run?
- Firms face a perfectly elastic demand curve (correct)
- Firms can easily enter or exit the market
- Firms produce differentiated products
- Firms have complete control over the market price
What is the main difference between a monopoly and a perfectly competitive market?
What is the main difference between a monopoly and a perfectly competitive market?
- A monopoly has a single seller, while perfect competition has many sellers
- A monopoly produces differentiated products, while perfect competition produces homogeneous products
- A monopoly faces a perfectly inelastic demand curve, while perfect competition faces a perfectly elastic demand curve
- All of the above (correct)
In monopolistic competition, what is the relationship between average revenue and marginal revenue?
In monopolistic competition, what is the relationship between average revenue and marginal revenue?
- The relationship depends on the elasticity of demand (correct)
- Average revenue is always equal to marginal revenue
- Average revenue is always greater than marginal revenue
- Marginal revenue is always greater than average revenue
According to the theory of marginal productivity, what determines a factor's wage or rent?
According to the theory of marginal productivity, what determines a factor's wage or rent?
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What is the main limitation of the Ricardian theory of rent?
What is the main limitation of the Ricardian theory of rent?
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