Economics help... again?

Question

The demand curve confronting a competitive firm:

a)Equals the marginal revenue curve.

b)Is horizontal, as is the market demand curve.

c)Slopes downward, while the market demand curve is horizontal.

d)Slopes downward and the marginal revenue curve is below it.

The short run is the time period:

a)Over which an investment decision can be made.

b)Necessary so that profits can be earned from production.

c)In which some costs are fixed.

d)All of the above.

Perfect competition is a situation in which:

a)Owners take on additional risk and earn huge profits.

b)Companies constantly raise the price of goods and services in order to compete with each other.

c)There are many buyers but only a few sellers.

d)There are many firms and no buyer or seller has market power.

A firm that makes zero economic profits:

a)Must eventually go bankrupt.

b)Does not cover its variable costs and should shut down.

c)Incurs an accounting loss.

d)Covers all its costs

Answer 1

1.) b

2.) c

3.) d

4.) d

Answer 2

1. The demand curve confronting a competitive firm:

Is horizontal but market demand curve need not be horizontal. so best answer is

a)equals the marginal revenue curve is true

2.The short run is the time period:

c)In which some costs are fixed.

3.Perfect competition is a situation in which:.

d)There are many firms and no buyer or seller has market power.

4.A firm that makes zero economic profits:

d)Covers all its costs

Answer 3

1-b (for purely competetive)

2-c

3-d

4-d