True or false? A competitive firm's supply curve is identical to its marginal cost curve.
Question:
True or false? A competitive firm's supply curve is identical to its marginal cost curve.
Firm:
A firm is a type of establishment that is governed and controlled by its members. The firm engages in production activities and also sell their produce in the market. They earn revenue against the goods and services sold and can also earn profits.
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The supply curve of a perfectly competitive firm depicts the total quantity of the output produced that the firm sells in the...
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Chapter 7 / Lesson 1Perfect competition is perpetuated in regulated economic market systems, as the concept of the 'invisible hand,' devised by Adam Smith, keeps supply and demand lines in check. Learn more about these concepts, the five requirements for a perfectly competitive market, and market equilibrium, seeing applications of each through examples.
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- True or false? A monopolistic firm's demand curve is less elastic than a purely competitive firm's demand curve.
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- True or False: A monopoly's supply curve is the portion of its marginal cost curve that lies above its average variable cost curve.
- Since a perfectly competitive firm has no market power, its marginal cost curve is flat (horizontal). True or False?
- True or False: In competitive markets, price exceeds marginal cost; in monopolized markets, price equals marginal cost.
- True or false? Monopolies charge a mark-up over marginal cost because they face a perfectly elastic supply curve.
- True or false? A monopolistic firm's demand curve is always inelastic.
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- The firm's entire marginal cost curve is its short-run supply curve. Is the preceding statement true or false? Explain your answer.
- In a monopolistically competitive market equilibrium, the price is equal to the marginal cost. a. True b. False
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- If the demand curve of a competitive firm is tangent to the low point on the AVC curve, the firm's profits are the same whether it shuts down or produces. (a) True (b) False.
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- True or false? The marginal product curve rises when the marginal cost curve rises.
- True or false? In a perfectly competitive market, price is equal to marginal revenue at every output level for the firm.
- True or false? A pure monopolistic demand curve is the industry demand curve.
- Similar to monopoly, Monopolistically Competitive firms face down-sloping demand curve. a. True b. False
- True or false? Firms with market power price above marginal cost.
- Answer true or false: The monopolistic competitive firm faces a perfectly elastic demand curve.
- If marginal costs always increase as output increases, then the average fixed cost curve will be U-shaped. True ; False.
- True or false? In a competitive industry, the price elasticity of the aggregate industry supply curve will always be greater than or equal to the price elasticity of the supply of any individual firm.
- True or False: When a perfectly competitive firm's demand curve lies above its average total cost curve, the firm incurs an economic loss at that level of output.
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- True or false? Marginal revenue is less than price for monopolies and monopolistically competitive firms.
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