
4.1.5.3 Perfect competition NOTES
Quiz
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Social Studies
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Professional Development
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James Hannaford
Used 3+ times
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13 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a key characteristic of firms operating in perfectly competitive markets according to the document?
They are price takers.
They have significant market power.
They are price setters.
They have restricted market entry.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Perfect competition assumes which of the following conditions?
Perfect knowledge.
Limited number of producers.
Differentiated products.
High entry barriers.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What outcome results from perfect competition, given certain assumptions?
Efficient allocation of resources.
Inefficient resource allocation.
Increased externalities.
Decreased market competition.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What determines a firm's decision to produce in a perfectly competitive market in the short run?
The firm's total fixed costs
The price relative to its average variable cost (AVC)
The number of competitors in the market
The firm's long-run average cost (LRAC)
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens when the price is below the average variable cost (AVC) in a perfectly competitive market?
The firm will increase production
The firm will continue producing at the same level
The firm will shut down.
The firm will permanently exit the market
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the long run, what is the significance of the long-run average cost (LRAC) curve's minimum point for perfectly competitive firms?
It indicates the point of maximum profit
It represents the scale at which firms are least efficient
It is where firms operate at their most efficient scale - productive efficiency
It determines the number of firms in the market
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is NOT a characteristic of a perfectly competitive market?
Identical products
Barriers to entry and exit
Freedom of entry and exit
Intense price competition
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