Exam (elaborations)
ecs1501 assessment 10
- Course
- Esc1501
- Institution
- University Of South Africa (Unisa)
ecs1501 assessment 10
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By: elsiesongo78 • 1 year ago
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5/31/23, 1:16 PM Assessment 10: Attempt reviewMENU
Dashboard / My courses / ECS1501-23-S1 / Assessments / Assessment 10
Started on Monday, 29 May 2023, 11:38 AM
State Finished
Completed on Wednesday, 31 May 2023, 1:16 PM
Time taken 2 days 1 hour
Marks 17.00/20.00
Grade 85.00 out of 100.00
Question 1
Complete
Not graded
I confirm
that this assessment will be my own individual work;
that I will not communicate with anyone else in any way during the completion of this assessment;
that I will not cheat in any way in completing and submitting this assessment.
I confirm.
I do not confirm.
Alt+Q
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,5/31/23, 1:16 PM Assessment 10: Attempt review
Question 2
Complete
Mark 1.00 out of 1.00
MENU
In a perfectly competitive industry, the market price is R20. An individual firm produces output at which MC = R25. What should the firm do
Dashboard
to / My courses
maximise profits / ECS1501-23-S1
or to minimise losses in the/ short
Assessments
run? / Assessment 10
they should leave the output unchanged.
they should decrease production.
they should increase production.
they should shut down.
In a perfect competitive market P = AR = MR, as depicted by a horizontal demand curve at the given market price (R20). In the question, the
MC > MR or R25 > R20, which means firms are producing at a loss in the short run and thus need to decrease production to reach again the
profit-maximising level of output where MR = MC.
Question 3
Complete
Mark 1.00 out of 1.00
Which of the following is not a characteristic of perfect competition in the short run?
All buyers and sellers have perfect knowledge of market conditions.
The equilibrium level of output occurs where marginal cost equals marginal revenue.
All firms are price takers.
All firms produce where average costs are minimised.
All perfectly competitive firms are price takers and maximise profits where MR = MC. They also operate in markets where there is perfect
information. In the short run, however, they do not all produce at minimum average costs.
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, 5/31/23, 1:16 PM Assessment 10: Attempt review
Question 4
Complete
Mark 1.00 out of 1.00
MENU
When a perfectly competitive industry is in a long-run equilibrium, all the firms in the industry will
Dashboard / My courses / ECS1501-23-S1 / Assessments / Assessment 10
earn an economic profit.
earn a normal profit.
make an economic loss.
earn zero profits.
In the long run, firms in a perfectly competitive industry can only earn a normal profit. If for example firms are making an economic profit,
this will prompt other firms to enter the industry. When this happens, supply of the product increases, causing prices to fall. Thus firms go
from earning an economic profit to earning a normal profit. The opposite is true in the case where firms are initially making an economic
loss.
Question 5
Complete
Mark 1.00 out of 1.00
Which one of the following is not a requirement for or a characteristic of perfect competition?
the good must be homogeneous.
there should be no government intervention.
all market participants should have perfect knowledge of market conditions.
every firm must have the power to set its price.
All the firms in a perfect competitive market are price takers, which means that the price determined in the market is given, and no firm can
set prices or manipulate prices. All the other alternatives are characteristics of perfect competition.
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