A.   long-run average cost curve.

B.   marginal cost curve.

C.   marginal revenue curve.

D.   total economic profit curve.

A.   until the long average cost curve rises above the demand curve.

B.   until all loss making firms leaves the industry.

C.   until price becomes tangent to the long run average cost curve.

D.   until each firm can earn acceptable level of economic profit.

A.   firms facing horizontal demand curves.

B.   free entry and exit.

C.   homogeneous products.

D.   few sellers.

A.   a large number of small firms

B.   each individual firm having some control over the market price

C.   a few large firms

D.   firms producing specialized products in order to attract consumers

A.   Consumers pay little attention to brand names.

B.   Firms advertise to increase their market share.

C.   Firms pay no attention to their competitors' output levels.

D.   Profits are low.

A.   always falls.

B.   falls only if the new firm is more efficient than existing firms.

C.   falls only if existing firms gang up on the entrant.

D.   falls only if existing firms are earning no economic profit.

A.   lease agreement on real estate.

B.   contract for labor services.

C.   All of these are correct.

D.   purchasing machinery.

A.   most effective policy action would be a subsidy to firms for the reduction of emissions.

B.   appropriate course of action for government is to increase R&D outlays to develop technology to remove the emissions from the environment.

C.   most effective policy action would be a tax on polluting firms.

D.   appropriate course of action for government is to do nothing.

A.   giver.

B.   leader.

C.   maker.

D.   taker.

A.   average revenue equals variable costs.

B.   marginal revenue equals marginal costs.

C.   total revenue exceeds variable costs.

D.   total revenue exceeds total costs.

A.   may earn a profit or a loss.

B.   earns a profit only if the firm has no fixed costs.

C.   never earns a profit.

D.   always earns a profit.