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# In the long-run, any perfectly competitive firm that produces will choose a quantity such that

In the long-run, any perfectly competitive firm that produces will choose a quantity such that:

A. short-run average cost is minimized

B. long-run total cost is minimized

C. long-run marginal cost equals long-run marginal cost

D. price is greater marginal cost

52.Which is not true of a perfectly competitive market?

A. The typical industry demand curve is downward sloping

B. There is no incentive to innovate since economic profit is zero in the long-run

C. If the long-run average total cost curve is horizontal in the relevant range of production, perfectly competitive firms can be various sizes in long-run equilibrium

D. At long-run equilibrium, economic profit is less than accounting profit

53.A firm is currently selling its product at €20 each. It estimates that its average total cost of production is €100 and its average fixed cost is €40. In the short run the firm should:

A. shutdown

B. continue production at a point where P = MC

C. hire more employees

54.Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q. Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q.

What is the industry supply curve?

A. P = 500 + Q

B. P = 50 + 0.1Q

C. P = -500 + 10P

D. P = 50 + 10 Q

55.Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q. Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q.

How many units of output will be produced by a firm operating in this market with a MC = 130Q?

A. 2

B. 5

C. 0.70

D. It is impossible to answer with the information given

56.The expansion of the car manufacturing industry causes an improvement in the assembly line, so reducing charges to each firm in that industry. This is an example of:

A. constant returns to scale

B. a decreasing-cost industry

C. a decreasing returns to scale

D. an increasing-cost industry

57.Competitive markets result allocative efficiency because they:

A. maximize the total benefits from exchange

B. make sure goods are produce at the lowest costs

C. generate the most benefits for consumers

D. distribute resources in the most equitable way

Feb 11 2020 View more View Less Get Solution