ECON 102 Quiz 7 Answers (Penn State University)

ECON 102 Quiz 7 Answers (Penn State University) Question 1 Which of the following markets is the closest to being perfectly competitive? Question 2 When we say that a firm is a "price taker", we mean that Question 3 In the above figure, the demand curve depicted on which graph represents the demand curve faced by a perfectly competitive firm? Question 4 If a perfectly competitive firm chooses output such that MR< MC Question 5 A perfectly competitive firm will maximize profit by choosing quantity such that Question 6 The above figure represents the cost curves for a perfectly competitive firm. Below what price will the firm shut down? Question 7 The above figure represents the cost curves for a perfectly competitive firm. Above what price will the firm be making positive economic profits? Question 8 In the above figure, the left hand side graph represents a perfectly competitive industry and the right hand side graph represents a perfectly competitive firm. Which line represents the demand curve that the firm faces? Question 9 In the above figure, the left hand side graph represents a perfectly competitive industry and the right hand side graph represents a perfectly competitive firm. As the demand curve decreases from D2 to D1, Question 10 Why do perfectly competitive firms in the long run always make zero economic profit?