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Questions and Answers
What is the goal of a competitive firm?
What is the goal of a competitive firm?
- To minimize revenue
- To ignore market conditions
- To maximize profit (correct)
- To decrease quantity produced
What is the key assumption for a perfectly competitive firm?
What is the key assumption for a perfectly competitive firm?
- Price is constant (correct)
- Price is controlled by the firm
- Price is variable
- Price is irrelevant
What does the long-run market supply curve reflect?
What does the long-run market supply curve reflect?
- Individual firm's marginal revenue curves (correct)
- Market demand curve
- Firms' short-run decisions to shut down
- Price changes over time
At what output level does profit maximization occur?
At what output level does profit maximization occur?
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When do firms in perfectly competitive markets shut down in the short run?
When do firms in perfectly competitive markets shut down in the short run?
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