Multiple choice questions based on competitive market

Reference no: EM1370345

A perfectly competitive market firm realizes an average of $11.00 and an average total cost of $10.00. Its marginal cost curve crosses the marginal revenue curve at an output level of 100 units. The current profit is $100.00. What is likely to occur in this market?
(A) Price will go down (B) Firms will leave the market (C)Cost will go up (D)Cost will go down

Details: Which is correct.
(A) A firm with fixed cost always has losses for low levels of output.
(B) A firm with fixed cost must incur economic losses if it chooses not to produce output.
(C) A firm with fixed cost can't maximize profit in th short run.
(D) A firm with fixed cost is always able to sell its product for a price that exceeds marginal revenue.

Details: Which of the following state is true aboout fixed cost?

(A) Fixed cost is always large in the long run.
(B) Fixed cost is seldom larger than variable cost.
(C) Fixed cost is a short run phenomenon.
(D) Fixed Cost can never exceed variable cost in a profitable firm.

Subject: Monopolies
Details: One problem with monopolies is that they can
(A) Profiteer at the expense of consumers.
(B) Price their product at a level that forces consumers to pay more then they can afford,
(C)Restrict output below the socially efficient level of production

Subject: Perfectly Competitve Market
Details: Which statement is true in a Perfectly Competitve market.
(A)Changes in demand causes short term changes in the price and no change in quantity supplied to market.
(B) Changes in demand cause no long term changes in price and permanent changes in quantity supplied to the market
(C) Changes in demand cause no changes in price and long term changes in quantity supplied to the market.
(D) Changes in demand cause no chages in price and permanent changes in quantity supplied to the market.

Reference no: EM1370345

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