In perfect competition, ___________________.

only firms know their competitors' prices
there are many firms that sell similar products
there are no restrictions on entry into the industry
firms in the industry have advantages over firms that plan to enter the industry

In perfect competition, each firm ____________________________.

is a price taker
faces a perfectly inelastic demand for its product
can influence the price that it charges
produces as much as it can

Normal profit is ____________________________.

equal to total revenue minus marginal cost
included in the firm's total cost
equal to economic profit minus total cost
equal to total revenue minus total cost

A competitive firm's total revenue minus its total cost equals its __________.

profit
economic profit
normal profit
opportunity cost

In the short run, firms ___________ but in the long run, firms make ___________.

make economic losses; positive economic profits
can incur economic losses; positive economic profits
make positive economic profits; positive economic profits
can incur economic losses; zero economic profit

In perfect competition, the firm's marginal revenue ________________________.

equals the market price
exceeds the price it charges
equals its normal profit
is less than the market price

When a competitive firm produces the profit-maximizing output and it is at its shutdown point, the firm's ______________________.

marginal revenue equals its average fixed cost
marginal cost is less than its average variable cost
total revenue equals its total variable cost
total revenue is less than its total variable cost

In a competitive industry when the plant size of each firm and the number of firms is given, the quantity supplied by all firms at each price is shown on the ________________________.

the long-run industry supply curve
the vertical supply curve at the shutdown point
the short-run industry supply curve
the horizontal supply curve at the market price

The presence of external economies _______ each firm's average costs as the industry output _______ and the presence of external diseconomies _______ each firm's average costs as industry output _______.

lower; decreases; lower; increases
lower; increases; raise; increases
raise; increases; lower; increases
lower; increases; raise; decreases

The _______ how the quantity supplied by an industry changes as the market price changes when firms have made all possible adjustments.

individual firms' supply curves show
individual firms' marginal cost curves show
long-run industry supply curve shows
short-run industry supply curve shows

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