Question

1. For a purely competitive firm total revenue:

1. is price times quantity sold.
2. increases by a constant absolute amount as output expands.
3. graphs as a straight upsloping line from the origin.
4. has all of these characteristics.

Answer:

1. In the short run the individual competitive firm's supply curve is that segment of the:

1. average variable cost curve lying below the marginal cost curve.
2. marginal cost curve lying above the average variable cost curve.
3. marginal revenue curve lying below the demand curve.
4. marginal cost curve lying between the average total cost and average variable cost curves.

Answer: