Perfect Market and General Equilibrium Theory
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Questions and Answers

What is a perfect market in economics also known as?

  • Monopsonistic market
  • Monopolistic market
  • Atomistic market (correct)
  • Oligopolistic market

    • In a perfectly competitive market, what is the condition for allocative efficiency?

  • Output occurs where marginal cost is minimized
  • Output occurs where marginal cost exceeds average revenue
  • Output occurs where average cost is minimized
  • Output occurs where marginal cost equals average revenue (correct)

    • What does a profit-maximizing producer face in a perfectly competitive market?

  • Market price higher than its marginal cost
  • No specific relationship between market price and marginal cost
  • Market price equal to its marginal cost (correct)
  • Market price lower than its marginal cost

    • Why does a monopoly not have a supply curve?

    <p>Because it does not face a perfectly competitive market price</p> Signup and view all the answers

    In the short-run, why are perfectly competitive markets not necessarily productively efficient?

    <p>Output will not always occur where marginal cost equals average cost</p> Signup and view all the answers

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