40) A perfectly competitive firm will earn ________ economic profits in the range of output for which the firm's price is above its minimum average total cost. A) positive B) negative C) zero D) Any of the above answers could be correct.
40) A
A) positive
B) negative
C) zero
D) Any of the above answers could be correct.
41) If a perfectly competitive firm's average total cost curve is below its
A) positive
B) breakeven
C) negative
D) zero
42) A perfectly competitive firm ________ at the level of output where P = ATC.
A) earns an economic profit
B) suffers an economic loss
C) breaks even
D) shuts down
43) If P = MC and MC ATC, then a perfectly competitive firm will earn ________ profits.
A) positive
B) zero
C) negative
D) break-even
44) If a perfectly competitive firm is currently producing where P = MC and MC = ATC, then the firm will earn ________ profits.
A) positive
B) zero
C) negative
D) above normal
45) If there is an increase in industry supply while the industry demand remains the same, then an individual firm in a perfectly competitive industry currently earning negative profits will see its profits
A) increase.
B) not change.
C) decrease further.
D) impossible to determine
46) If there is a decrease in industry supply while the industry demand curve remains the same, then an individual firm in a perfectly competitive industry currently earning profits will see its profits
A) increase.
B) not change.
C) decrease.
D) impossible to determine
47) Perfectly competitive firms
A) sell homogeneous products.
B) are price makers.
C) are large relative to the size of the market.
D) All of the above are correct.
48) The ________ part of a perfectly competitive firm's marginal cost curve is the firm's short-run supply curve.
A) rising
B) falling
C) horizontal
D) backward-bending
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