micro drills10 questions
Perfect Competition — Practice Set 2
Follow profits and losses through entry and exit to the long-run equilibrium, and learn why competition is efficient.
Q1.
If competitive firms earn short-run economic profits, in the long run:
Multiple choice · Intermediate
Q2.
Long-run equilibrium in perfect competition occurs where:
Multiple choice · Intermediate
Q3.
Allocative efficiency means:
Multiple choice · Intermediate
Q4.
Productive efficiency means:
Multiple choice · Intermediate
Q5.
If a competitive industry suffers persistent losses, the long-run response is:
Multiple choice · Intermediate
Q6.
A permanent increase in demand in a constant-cost competitive industry raises price ___ in the long run.
Multiple choice · Advanced
Q7.
In an increasing-cost industry, long-run supply slopes upward because:
Multiple choice · Advanced
Q8.
Consumer surplus in a competitive market is maximized because:
Multiple choice · Advanced
Q9.
Which market is closest to perfect competition?
Multiple choice · Foundations
Q10.
A competitive firm cannot earn long-run economic profit because:
Multiple choice · Intermediate