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Practice Questions: Perfect Competition 2

Related Topics

Wize University Microeconomics Textbook > Firms in Competitive Markets (Perfect Competition)

Long Run

4 Activities

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Mark Yourself Question
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  3. View the solution and report whether you got it right or wrong.

Competition in the Short Run vs. Long Run

Q; Does economic loss make a business shut down?

Q: If firms in perfect competition make zero profits in the long-run, does that mean they are non-profit?

Q: What are the implicit costs when considering economic profits?

Q: Where do firms enter and exit from?

Q: If firms are identical, then why do some firms enter/exit while some firms stay?

Q: What’s the difference between exiting and shutting down?

More Long Run Questions:
Suppose the price in the perfectly competitive market above is P3.
Suppose a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
If a firm is making a normal profit then
True/false:
In the diagram below, the long run price and output are:
If firms enter a competitive industry, the
Does economic loss make a business shut down?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
Suppose that a perfectly competitive market is in long run equilibrium. What happens if there is a new technology that lowers the variable costs of production for a quarter of the firms?
A firm will exit a perfectly competitive market in the long run when the total revenue is insufficient to cover the
Practice: Perfect Competition
Competition in the Short Run vs. Long Run
Practice: Perfect Competition in Long run
If a firm is perfectly competitive and is in long-run equilibrium, which of the following statements is true?
A firm in a perfectly competitive equilibrium market makes a normal profit if
A firm will exit a perfectly competitive market in the long run when the price is low to the point where total revenue is insufficient to cover the
Which of the following market structures has excess capacity?
Suppose that the market for growing avocados is perfectly competitive. The price charged by producers is $2 per avocado and the marginal cost is $1.25.
The market for olive oil is perfectly competitive and is in equilibrium. On the news, Dr. Simpson says "Olive oil has been found to be associated with high risk for cardiovascular disease according to our studies.”
Which of the following will likely occur as result of the news?