Q1. A perfect competition has all of the following characteristics EXCEPT:

A)     barriers to entry don't exist.

B)     a differentiated product.

C)     a large number of independent firms.

Q2. Which of the following is NOT a condition of a perfectly competitive market?

A)   Indistinguishable products.

B)   Firms face elastic demand curves.

C)   Sellers make economic profits.

Q3. Which of the following characteristics of perfect competition explains why firms in perfect competition are referred to as price takers?

A)   There are no barriers to entry or exit.

B)   Each firm is small relative to the total market.

C)   The demand curve is horizontal for firms in perfect competition.

Q4. Firms in a perfectly competitive industry will increase their output until which of the following conditions is met?

A)   Marginal revenue equals average total cost.

B)   Total revenue equals price.

C)   Marginal cost equals price.

Q5. In a perfectly competitive market, what determines the price of the product?

A)   Market supply and demand.

B)   The producers of the product.

C)   The members of the supply chain.

[此贴子已经被作者于2009-1-6 13:45:37编辑过]

答案和详解如下：

Q1. A perfect competition has all of the following characteristics EXCEPT:

A)     barriers to entry don't exist.

B)     a differentiated product.

C)     a large number of independent firms.

Correct answer is B)

In a perfectly competitive market all the firms produce a homogeneous product.

Q2. Which of the following is NOT a condition of a perfectly competitive market?

A)   Indistinguishable products.

B)   Firms face elastic demand curves.

C)   Sellers make economic profits.

Correct answer is C)

The only item listed that is not a condition of a perfectly competitive market is that sellers make economic profits. In fact, sellers do not make economic profit after taking into account their opportunity costs.

Q3. Which of the following characteristics of perfect competition explains why firms in perfect competition are referred to as price takers?

A)   There are no barriers to entry or exit.

B)   Each firm is small relative to the total market.

C)   The demand curve is horizontal for firms in perfect competition.

Correct answer is C)

Firms under perfect competition face horizontal (perfectly elastic) demand curves. They can sell all of their output at the prevailing market price, but they will sell nothing if they set their output price above the market price. They are price takers because they have to “take” the market price as a given.

Q4. Firms in a perfectly competitive industry will increase their output until which of the following conditions is met?

A)   Marginal revenue equals average total cost.

B)   Total revenue equals price.

C)   Marginal cost equals price.

Correct answer is C)

When a firm operates under conditions of perfect competition, marginal revenue always equals price. Under perfect competition, price is constant (a horizontal line) so marginal revenue is constant. Therefore a firm will increase output until marginal cost equals price.

Q5. In a perfectly competitive market, what determines the price of the product?

A)   Market supply and demand.

B)   The producers of the product.

C)   The members of the supply chain.

Correct answer is A)

Individual firms in perfect competition have no influence over market price. They are price takers who must sell at the prevailing market price. If they set their price higher than the market, they will sell nothing.

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