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ECON 705 Review Questions And Answers Latest
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ECON 705 Review Questions And Answers Latest
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ECON 705 Review Questions And Answers Latest2023-2024
Quiz :What are the conditions of perfect competition? - Answer :1. Many firms
produce identical products
2. Sellers are price-takers
3. zero barrier to entry
Quiz :What is the key assumption of a perfectly competitive market? - Answer
:Too many sellers, identical product. Price-Takers. No barrier to entry.
Quiz :Sources of Monopoly Power - Answer :- Government action
- Economies of scale
- Exclusive access to an important input
- Technological innovation
- legal restrictions
Quiz :monopoly is characterized by: - Answer :one seller with all the power
Quiz :What is the characteristic of long-run equilibrium for a perfectly
competitive firm? - Answer :For a perfectly competitive market, MR = MC,
which must be equal to ATC
Quiz :Firms seek to maximize: - Answer :profit
Quiz :What is the profit maximization rule? - Answer :MR >= MC
Quiz :shut down rule - Answer :the firm should shut down if the price of the
product is less than the average variable cost of production at the profit-
maximizing output
Quiz :Per unit profit - Answer :This is calculated by taking the total profit
divided by the quantity.
Quiz :Equation for profit calculation - Answer :Profit = TR - TC
Quiz :optimal output rule - Answer :profit is maximized by producing the
quantity of output at which the MR of the last unit produced is equal to its MC
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