Question 11ÿptsThe marginal cost curve above the minimum average variable costis the firm’s short-run supply curve.is equal to the firm’s marginal revenue curve.covers the area where a firm should shut down.indicates points where the firm will realize an economic profit.Flag this QuestionQuestion 21ÿptsA monopolist will have a marginal revenue curve that isabove the marginal cost curve.below the demand curve.identical to the marginal cost curve.identical to the demand curve.Flag this QuestionQuestion 31ÿptsIf, in the short run, a perfectly competitive firm is producing at a point where total cost is greater than total revenue, then the firm shouldset a lower price for its output.set a higher price for its output.continue to produce because accounting profits are positive.continue to produce as long as P > AVC.shut down because economic profits are negative.Flag this QuestionQuestion 41ÿptsA firm in a monopolistically competitive industry faces a downward-sloping demand curve becausebarriers to entry are high.nonprice competition is missing.the product is differentiated.the product is homogeneous.Flag this QuestionQuestion 51ÿptsWhich of the following is NOT an essential characteristic of monopolistic competition?a very elastic demand curveshort-run profitsrelatively easy entrydifferentiated productsa small number of sellersFlag this QuestionQuestion 61ÿptsA competitive firmhas no supply curve.must accept the price determined by the intersection of the market supply and demand curves.has the ability to set its own price.must base its competitive price on product differentiation.can consider only its location in setting price.Flag this QuestionQuestion 71ÿptsAlong a downward-sloping monopoly demand curve,marginal revenue is equal to zero when price is equal to zero.marginal revenue decreases when price decreases.elasticity of demand is constant.marginal revenue is greater than price.Flag this QuestionQuestion 81ÿptsUnder which market structure do firms face the flattest (most elastic) demand curve?perfect competitionmonopolistic competitionoligopolymonopolyFlag this QuestionQuestion 91ÿptsAverage revenue (AR)does not appear in the model of perfect competition.is greater than price when economic profits are present.equals TR/Q.occurs when MC = MR.Flag this QuestionQuestion 101ÿptsWhen P = AR = MR = AC = MC,normal profits are negative.normal profits are zero.economic profits are negative.economic profits are zero.economic profits are positive.

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