ECO 201 Exam 3 Questions and
Answers 100% Pass
What are the assumptions underlying perfectly competitive markets? - ✔✔1. Large
number of buyers and sellers
2. Identical products
3. Easy entry and exit
4. Perfect information (buyers know price of all sellers)
If marginal cost begins below average cost and is everywhere increasing, what is true
about the shape of the average cost cover? - ✔✔Average cost intersects marginal cost at
its lowest point possible.
Marginal Revenue (MR) - ✔✔the extra revenue associated with selling an extra unit of
output or the change in total revenue with a one-unit change in output
Marginal Cost (MC) - ✔✔the change in total costs associated with a one-unit change in
output
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
Answers 100% Pass
What are the assumptions underlying perfectly competitive markets? - ✔✔1. Large
number of buyers and sellers
2. Identical products
3. Easy entry and exit
4. Perfect information (buyers know price of all sellers)
If marginal cost begins below average cost and is everywhere increasing, what is true
about the shape of the average cost cover? - ✔✔Average cost intersects marginal cost at
its lowest point possible.
Marginal Revenue (MR) - ✔✔the extra revenue associated with selling an extra unit of
output or the change in total revenue with a one-unit change in output
Marginal Cost (MC) - ✔✔the change in total costs associated with a one-unit change in
output
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
