6 Questions
What is the characteristic of a firm in pure competition in the short run?
Price taker
If a firm in pure competition is making economic losses in the short run, what will happen in the long run?
Firms will exit the industry, reducing supply and driving prices up
In pure competition in the short run, what happens to a firm if its total revenue is less than its total variable costs?
The firm should shut down in the short run
In pure competition in the short run, what happens to a firm's economic profit if its total revenue is equal to its total variable costs?
The firm earns normal profit
What is the characteristic of the short run supply curve for a firm in pure competition?
It is the portion of the marginal cost curve that lies above the average variable cost curve
If a firm in pure competition is making economic losses in the short run, what will happen in the long run?
Firms will exit the industry, shifting the market supply curve to the left
Test your knowledge of pure competition in the short run with this quiz. Learn about the impact on a firm when its total revenue is less than total variable costs, the characteristics of a firm in pure competition, and the long-run outcome for a firm experiencing economic losses in the short run.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
