A.   long-run average cost curve.

B.   marginal cost curve.

C.   marginal revenue curve.

D.   total economic profit curve.

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

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

C.   until all loss making firms leaves the industry.

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

A.   free entry and exit.

B.   firms facing horizontal demand curves.

C.   homogeneous products.

D.   few sellers.

A.   firms producing specialized products in order to attract consumers

B.   a few large firms

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

D.   a large number of small firms

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

B.   Profits are low.

C.   Consumers pay little attention to brand names.

D.   Firms advertise to increase their market share.

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.   All of these are correct.

B.   lease agreement on real estate.

C.   purchasing machinery.

D.   contract for labor services.

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

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

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

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

A.   leader.

B.   giver.

C.   maker.

D.   taker.

A.   average revenue equals variable costs.

B.   total revenue exceeds total costs.

C.   total revenue exceeds variable costs.

D.   marginal revenue equals marginal costs.

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

B.   never earns a profit.

C.   may earn a profit or a loss.

D.   always earns a profit.