K Question 7 of 25 080 points MC Qu 41 A perfectly competiti

K Question 7 (of 25) 0.80 points MC Qu. 41 A perfectly competitive firm is a.. A perfectly competitive firm is a price taker because The price of the product is determined by many buyers and sellers. O It has market power. O Market supply is upward-sloping Its products are differentiated. References 02 Multiple Choice MC Qu. 41 A perfectly competitive firm is a... O Tvpe here to search

Solution

1) A perfectly competitive firm is a price taker because

Solution: the price of product is determined by many buyers and sellers

Explanation: The four basic assumptions are: there are many buyers and sellers, the product is homogeneous, there are no barriers to entry, and consumers have perfect information

2) A competitive firms cannot individually affect market price because

Solution: There are many firms, none of which has a significant share of total output

Explanation: A competitive firms is a price taker

3) The demand curve for each perfectly competitive firm is

Solution: Horizontal

Explanation: Because of the nature of the perfectly competitive market, the demand curve for a perfectly competitive firm is horizontal

4) A firm maximizes total profit when

Solution: total revenue exceeds total cost by the greatest amount

Explanation: A firm\'s total profit is maximized will produce at the level of output where total revenue exceeds total cost by the greatest amount

5) Marginal revenue is the change in

Solution: total revenue when output is changed

Explanation: Marginal Revenue is the change total revenue of a firm that arises due to the production and sale of one additional unit of output.

6) For the perfectly competitive firm, the marginal revenue is always:

Solution: constant

Explanation: Under perfectly competitive there are many firms, none of which has a significant share of total output