Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is the characteristic of a firm in pure competition in the short run?
What is the characteristic of a firm in pure competition in the short run?
- Price manipulator
- Price taker (correct)
- Price controller
- Price maker
If a firm in pure competition is making economic losses in the short run, what will happen in the long run?
If a firm in pure competition is making economic losses in the short run, what will happen in the long run?
- Firms will enter the industry, increasing supply and driving prices down
- Consumers will reduce demand for the product
- Firms will exit the industry, reducing supply and driving prices up (correct)
- The government will intervene to stabilize the market
In pure competition in the short run, what happens to a firm if its total revenue is less than its total variable costs?
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 will continue operating as long as total fixed costs are covered
- The firm will reduce the prices to increase revenue
- The firm should increase production to cover the costs
- The firm should shut down in the short run (correct)
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?
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?
Signup and view all the answers
What is the characteristic of the short run supply curve for a firm in pure competition?
What is the characteristic of the short run supply curve for a firm in pure competition?
Signup and view all the answers
If a firm in pure competition is making economic losses in the short run, what will happen in the long run?
If a firm in pure competition is making economic losses in the short run, what will happen in the long run?
Signup and view all the answers
