Question 1 In a perfectly competitive market, positive economic profits act to Answer a. attract...

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Question 1  In a perfectly competitive market, positive economic profits act to Answer a. attract new entrants into the industry.  b. drive potential competitors away from the industry.  c. prevent reinvestment on the part of firms within the industry.  d. signal resource owners elsewhere not to invest their capital in this industry.  5 points Question 2  Which is always true at a firm's profit-maximizing rate of production? Answer a. Marginal Revenue > Marginal Cost  b. The total revenue curve lies below the total cost curve.  c.
	
Document Preview: Question 1 In a perfectly competitive market, positive economic profits act toAnswer  PRIVATE "" MACROBUTTON HTMLDirect  a.attract new entrants into the industry.   PRIVATE "" MACROBUTTON HTMLDirect  b.drive potential competitors away from the industry.   PRIVATE "" MACROBUTTON HTMLDirect  c.prevent reinvestment on the part of firms within the industry.   PRIVATE "" MACROBUTTON HTMLDirect  d.signal resource owners elsewhere not to invest their capital in this industry. 5 points     PRIVATE "" MACROBUTTON HTMLDirect  Question 2 Which is always true at a firm's profit-maximizing rate of production?Answer  PRIVATE "" MACROBUTTON HTMLDirect  a.Marginal Revenue > Marginal Cost   PRIVATE "" MACROBUTTON HTMLDirect  b.The total revenue curve lies below the total cost curve.   PRIVATE "" MACROBUTTON HTMLDirect  c.Marginal Revenue = Marginal Cost   PRIVATE "" MACROBUTTON HTMLDirect  d.Total Revenue = Total Costs 5 points     PRIVATE "" MACROBUTTON HTMLDirect  Question 3 For a firm in a perfectly competitive industry,Answer  PRIVATE "" MACROBUTTON HTMLDirect  a.short-run economic profits may be positive, but long-run economic profits must be zero.   PRIVATE "

David · Accepted Answer

Question 1 
1.   
In a perfectly competitive market, positive economic profits act to 
Answer 
  
a. attract new 
entrants 
into the 
industry. 
  
  
b. drive potential 
competitors 
away from the 
industry. 
  
  
c. prevent 
reinvestment on 
the part of firms 
within the 
industry.
  
d. signal resource 
owners 
elsewhere not to 
invest their 
capital in this 
industry.
5 points     
Question 2 
1.   
Which is always true at a firm's profit-maximizing rate of production? 
Answer 
  
a. Marginal 
Revenue > 
Marginal Cost 
  
  
b. The total revenue 
curve lies below 
the total cost 
curve.
  
c. Marginal 
Revenue = 
Marginal 
Cost
  
d. Total 
Revenue = 
Total Costs 
  
5 points     
Question 3 
1.   
For a firm in a perfectly competitive industry, 
Answer 
  
a. short-run economic 
profits may be 
positive, but long-
run economic 
profits must be 
zero.
  
b. short-run 
economic 
profits must 
be zero. 
  
  
c. short-run and 
long-run 
economic 
profits must be 
zero.
  
d. both short-run 
and long-run 
economic 
profits may be 
negative.
5 points     
Question 4 
1.   
All firms in a perfect competition industry 
Answer 
  
a. are price 
makers. 
    
b. produce differentiated 
products. 
    
c. produce identical 
products. 
    
d. lose 
money. 
  
5 points     
Question 5 
1.
In the above figure, at which output level is this firm earning negative economic profits? 
Answer 
  
a. 2   
  
b. 5   
  
c. 10   
  
d. 12   
5 points     
Question 6 
1.   
If a firm is perfectly competitive, then 
Answer 
  
a. its demand 
curve is 
perfectly 
elastic.   
  
b. it can independently 
set the price of the 
product it sells without 
regard to what other 
firms in the market are 
doing.
  
c.

Question 1 In a perfectly competitive market, positive economic profits act to Answer a. attract new entrants into the industry. b. drive potential competitors away from the industry. c. prevent...

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