EC 201- Final Exam NCSU Questions and
Answers (Top Grade Assured) 2026
Update
A competitive firm maximizes profit by choosing the quantity
at which - Correct Answers ✅marginal cost equals price
A profit-maximizing firm in a perfectly competitive market is
currently producing 500 units of output, at a price of $40 and
total cost of $1000. At this current level of output, marginal
cost is _______, and average total cost is_________. - Correct
Answers ✅$40, $2
In the long-run equilibrium of a perfectly competitive market
with identical firms, what are the relationships among price P,
marginal cost MC, and average total cost ATC? - Correct
Answers ✅P = MC and P = ATC
A perfectly competitive firm's short-run supply curve is its
_________ cost curve above its _________ cost curve. - Correct
Answers ✅marginal, average variable
The existence of economic losses in a perfectly competitive
market induces firms to __________ the market, which shifts
the market supply curve to the__________ and __________
market price. - Correct Answers ✅exit, left, increases
If a perfectly competitive market is one of constant costs, this
implies the long run market supply curve is - Correct
Answers ✅perfectly elastic
, EC 201- Final Exam NCSU Questions and
Answers (Top Grade Assured) 2026
Update
Suppose the market for building new homes is perfectly
competitive and one of constant costs. If the demand for new
homes increases, - Correct Answers ✅the price to build a
new home will go up in the short run, but not in the long run
Suppose the pretzel market is perfectly competitive and in its
long run equilibrium. If then there is a new process that
reduces the costs for each firm in the industry, short run
economic profits will be _________, though in the long run
economic profit will be _____ as firms _______ the industry. -
Correct Answers ✅positive, zero, enter
What is the relationship between price P, marginal revenue
MR, and marginal cost MC for a profit maximizing monopolist?
- Correct Answers ✅P > MR and MR = MC
Suppose the DeBeers company is a monopolist in its market
to sell diamonds. Also suppose this year the company earns
economic profits. This implies that the price of diamonds will -
Correct Answers ✅exceed both the marginal cost and
average cost of producing diamonds.
A significant long-run difference between monopoly and
perfect competition is that - Correct Answers ✅1. there's
free entry and exit in a perfectly competitive market, while
barriers to entry exist in a monopolized market.
Answers (Top Grade Assured) 2026
Update
A competitive firm maximizes profit by choosing the quantity
at which - Correct Answers ✅marginal cost equals price
A profit-maximizing firm in a perfectly competitive market is
currently producing 500 units of output, at a price of $40 and
total cost of $1000. At this current level of output, marginal
cost is _______, and average total cost is_________. - Correct
Answers ✅$40, $2
In the long-run equilibrium of a perfectly competitive market
with identical firms, what are the relationships among price P,
marginal cost MC, and average total cost ATC? - Correct
Answers ✅P = MC and P = ATC
A perfectly competitive firm's short-run supply curve is its
_________ cost curve above its _________ cost curve. - Correct
Answers ✅marginal, average variable
The existence of economic losses in a perfectly competitive
market induces firms to __________ the market, which shifts
the market supply curve to the__________ and __________
market price. - Correct Answers ✅exit, left, increases
If a perfectly competitive market is one of constant costs, this
implies the long run market supply curve is - Correct
Answers ✅perfectly elastic
, EC 201- Final Exam NCSU Questions and
Answers (Top Grade Assured) 2026
Update
Suppose the market for building new homes is perfectly
competitive and one of constant costs. If the demand for new
homes increases, - Correct Answers ✅the price to build a
new home will go up in the short run, but not in the long run
Suppose the pretzel market is perfectly competitive and in its
long run equilibrium. If then there is a new process that
reduces the costs for each firm in the industry, short run
economic profits will be _________, though in the long run
economic profit will be _____ as firms _______ the industry. -
Correct Answers ✅positive, zero, enter
What is the relationship between price P, marginal revenue
MR, and marginal cost MC for a profit maximizing monopolist?
- Correct Answers ✅P > MR and MR = MC
Suppose the DeBeers company is a monopolist in its market
to sell diamonds. Also suppose this year the company earns
economic profits. This implies that the price of diamonds will -
Correct Answers ✅exceed both the marginal cost and
average cost of producing diamonds.
A significant long-run difference between monopoly and
perfect competition is that - Correct Answers ✅1. there's
free entry and exit in a perfectly competitive market, while
barriers to entry exist in a monopolized market.
