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.
Answer and Explanation: 1
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View this answer- The statement is true
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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Perfect Competition in Economics & Adam Smith's 'Invisible Hand'
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Chapter 7 / Lesson 1
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Perfect 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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- Marginal cost curves are identical to supply curves. True or False. Explain.
- True or false? For a perfectly competitive industry or firm, the supply curve is the marginal cost curve below the average variable cost in the short run.
- True or false? A monopolistic firm's demand curve is less elastic than a purely competitive firm's demand curve.
- True or false? If there are no fixed costs and the marginal costs are strictly increasing, then the average cost curve is always below the marginal cost curve.
- 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.
- State true or false. Since a monopolist is a price taker, it cannot have a supply curve.
- The cost function of the firm is its supply curve. True or False? Explain.
- 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
- True or False: If the marginal cost curve is increasing, the average cost curve must be increasing, as well.
- True or false? A monopolist is constrained by marginal cost in setting its price.
- 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.
- True or false? The supply curve reflects the marginal cost of producing a particular quantity of a good.
- 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.
- For a perfectly competitive firm, price is identical to marginal revenue at every quantity. a. True b. False
- True or false? Marginal revenue is less than price for monopolies and monopolistically competitive firms.
- In monopolistic competition, firms equate price and marginal cost. Is this statement true or false? Explain.
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- A monopoly's marginal cost curve is the monopoly's supply curve. True or false? Explain your answer.
- 1. Consumer and producer surplus must always be equal. a. True b. False 2. The marginal cost curve is always below the average cost curve. a. True b. False
- True or False (Explain): At the equilibrium price, price will be equal marginal cost (for all firms that choose to produce) under perfect competition.
- True or False: The average total-cost curve is unaffected by diminishing marginal product. True or False: If the marginal-cost curve is rising, so is the average-total-cost curve.
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- For the perfectly competitive firm, price equals marginal revenue. a. True b. False
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- When a firm in a monopolistically competitive market earns zero economic profit, its product price must equal marginal cost. True False
- The two supply curves, P = (1/2)QS and P = 20QS, both have an identical price elasticity of supply. Is this statement true or false? Explain.
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- True or false? Equilibrium in a monopolized market is efficient because the monopolist always produces where marginal cost equals marginal revenue.
- True or false? Along a single demand curve, demand elasticity decreases as you move down the curve (to lower prices).
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- True or False: \\ Equilibrium in monopolistically competitive markets requires that firms be operating at the minimum point on the long-run average cost curve.
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- True or false? For prices greater than the minimum value of average variable cost, the firm's short-run supply curve coincides with its short-run marginal cost curve.
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- The demand curve in a perfectly competitive market is perfectly elastic. TRUE or FALSE.
- With respect to the kinked demand curve, price is greater than marginal costs. True False
- If the market demand curve for a good is a downward-sloping line, its price elasticity is constant. a. True. b. False.
- True or false? The long-run supply curve in a perfectly competitive market is perfectly elastic because of free entry and exit of firms.
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- True or false? If the demand curve for a good is a steep, straight line, then the demand for the good is inelastic at every point along that demand curve.
- In the monopolistic competition model, the firm's demand curve is a horizontal line. True or false?
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- A monopolist's marginal revenue curve is flatter than its demand curve. a. True b. False
- State true or false and justify your answer: If the price is greater than the marginal cost, a firm should produce less.
- The socially efficient quantity is found where the demand curve intersects the marginal cost curve. a. True b. False
- True or false? When a purely competitive industry is in long-run equilibrium, marginal cost is at its minimum level.
- True or false? A monopolist produces on the inelastic portion of its demand curve.
- The marginal revenue curve for a monopolist is always less than the price because of the price effect. a. True b. False
- If the demand curve is a linear function of price, then the price elasticity of demand is the same at all prices. a. True. b. False.
- True or False: Marginal Cost curve is intersecting the minimum of Average Fixed cost curve. Please explain your answer.
- A monopolist's marginal cost is less than the price it charges. A) True B) False
- True or false? The reason the supply curve slopes upward is that marginal cost is increasing.
- True or false? Ceteris paribus, the more elastic the supply curve, the larger the total subsidy.
- True or False: given the same unit cost, a monopolist will produce less output than a perfectly competitive firm.
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- True or false? A competitive firm faces a downward-sloping demand curve for its product.
- True or false? When a purely competitive industry is in long-run equilibrium, marginal cost is equal to total revenue.
- True or false? The value of the price elasticity of demand is not equal to the slope of the demand curve.
- True or false? In an efficient market, the supply curve will decrease by the amount of the external cost.
- True or False: The demand curve facing a monopolistically competitive firm is elastic. The goal of the firm's owner is to make it nearly inelastic. Explain.
- In monopolistic competition, firms equate marginal revenue and marginal cost. Is this statement true or false? Explain.
- Equilibrium in monopolistically competitive markets requires that firms be operating at the minimum point on the long-run average cost curve. a. True b. False
- True or false? The long-run aggregate supply curve is vertical because economic forces do not affect long-run aggregate supply.
- True or false? For a perfectly competitive industry or firm, a decreasing cost industry has an upward sloping supply curve in the long run.
- True or false? Marginal utility analysis is unrelated to the demand curve.
- True or false? A competitive firm will produce output up to the point where price equals average variable cost.
- State True or False: Suppose that a competitive firm finds that in its short-run equilibrium situation, its marginal cost is higher than its average total cost. If things are not expected to change an
- True or false? In a market in which there is a perfectly price discriminating monopolist, there is no consumer surplus.
- The marginal cost curve intersects the average total cost curve at its minimum point. A) True B) False
- True or false? According to the Cournot model, in a duopoly with a zero marginal cost, at equilibrium the sum of the two firms' output would be more than 50 percent of the market demand at a zero price.
- The ratio of price to marginal cost for a monopolist increases as the demand curve becomes more elastic. True or False? Explain
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