1. A perfectly elastic demand function
Select one:
a. is characteristic of an individual firm operating in a perfectly competitive market.
b. shows that a consumer is willing to pay any amount for the product.
c. shows that the individual firm can increase sales by lowering the price of output.
d. has a marginal revenue that is always decreasing.
2. Your local farmer has many competitors and exists in a market structure known as perfect competition. This means that price is determined outside of the individual farmer's ability to charge a price higher than the going market for a bushel of wheat, hence the farmer is
Select one:
a. a price maker and can therefore charge different customers different prices.
b. a price taker and cannot affect the market price of wheat.
c. always able to price produce above the competition and earn a larger profit.
d. never able to determine any prices he charges for anything, such as soybeans
3. All of the following are true regarding perfectly competitive price determination EXCEPT
Select one:
a. the individual firm takes the market price as given.
b. the individual firm is known as a market price maker.
c. the individual firm's marginal revenue curve is horizontal at the market price.
d. the market price is determined by the interactions among all buyers (households) and firms.
1. A perfectly elastic demand function
Select one:
a. is characteristic of an individual firm operating in a perfectly competitive market.
b. shows that a consumer is willing to pay any amount for the product.
c. shows that the individual firm can increase sales by lowering the price of output.
d. has a marginal revenue that is always decreasing.
2. Your local farmer has many competitors and exists in a market structure known as perfect competition. This means that price is determined outside of the individual farmer's ability to charge a price higher than the going market for a bushel of wheat, hence the farmer is
Select one:
a. a price maker and can therefore charge different customers different prices.
b. a price taker and cannot affect the market price of wheat.
c. always able to price produce above the competition and earn a larger profit.
d. never able to determine any prices he charges for anything, such as soybeans
3. All of the following are true regarding perfectly competitive price determination EXCEPT
Select one:
a. the individual firm takes the market price as given.
b. the individual firm is known as a market price maker.
c. the individual firm's marginal revenue curve is horizontal at the market price.
d. the market price is determined by the interactions among all buyers (households) and firms.
