ECS1501 ASSIGNMENT 11 OF SEMESTER 2 2022
What will happen if a shoe firm sells its shoes at a price lower than the opportunity cost
of the inputs used in the production process?
The firm will make both accounting and economic losses.
The firm will make both accounting and economic profits.
The firm will possibly make an economic profit and an accounting loss.
The firm will possibly make an accounting profit but will make an economic loss.
At what price should a firm produce to maximise profits in a perfectly competitive
market?
where price equals average revenue
where price equals marginal cost
where price equals marginal revenue
where price equals total revenue
Use the diagram below which diagram shows the short-run conditions of a firm in a
perfectly competitive market to answer the question.
, In the long run, ____ firms will ____ the industry so that the market supply curve shifts to
the _____, until prices ______ sufficiently so that all firms make a normal profit only.
existing firms; exit; right; decrease.
new firms; enter; right; decrease.
existing firms; exit; left; increase.
new firms; enter; left; increase.
Which one of the following is not a requirement for or a characteristic of perfect
competition?
the good must be homogeneous.
all market participants should have perfect knowledge of market conditions.
there should be no government intervention.
every firm must have the power to set its price.
What will happen if a shoe firm sells its shoes at a price lower than the opportunity cost
of the inputs used in the production process?
The firm will make both accounting and economic losses.
The firm will make both accounting and economic profits.
The firm will possibly make an economic profit and an accounting loss.
The firm will possibly make an accounting profit but will make an economic loss.
At what price should a firm produce to maximise profits in a perfectly competitive
market?
where price equals average revenue
where price equals marginal cost
where price equals marginal revenue
where price equals total revenue
Use the diagram below which diagram shows the short-run conditions of a firm in a
perfectly competitive market to answer the question.
, In the long run, ____ firms will ____ the industry so that the market supply curve shifts to
the _____, until prices ______ sufficiently so that all firms make a normal profit only.
existing firms; exit; right; decrease.
new firms; enter; right; decrease.
existing firms; exit; left; increase.
new firms; enter; left; increase.
Which one of the following is not a requirement for or a characteristic of perfect
competition?
the good must be homogeneous.
all market participants should have perfect knowledge of market conditions.
there should be no government intervention.
every firm must have the power to set its price.
