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 1 A perfectly competitive firm always makes zero economic profit: A) in the long run. B) in the long run but never in the short run. C) in the short run. D) in neither the short nor the long run. 2 Suppose there are 100 firms in a perfectly competitive market and each maximizes profit at 120 units of output when market price is \$5.00 per unit. One of the points on the market supply curve must be at: A) price = \$5 and quantity supplied = 220. B) price = \$5 and quantity supplied = 12,000. C) price = \$1000 and quantity supplied = 220. D) price = \$1000 and quantity supplied = 12,000. 3 (3.0K)Refer to the graph above. If market price is currently \$50 per unit, this perfectly competitive firm will maximize profit by producing: A) 45 units of output. B) 65 units of output. C) 85 units of output. D) between 55 and 65 units of output. 4 There is no incentive for firms to enter or leave an industry when: A) firms are earning zero economic profit. B) accounting profits are zero. C) firms are earning excess profits. D) firms are sustaining economic losses. 5 (2.0K)Refer to the graph above. The supply curve for this perfectly competitive firm is the segment of the: A) average total cost curve above point D. B) marginal cost curve above point C. C) average variable cost curve above point C. D) marginal cost curve above point B. 6 (3.0K)Refer to the graph above. Assuming the firm produces where marginal revenue equals marginal cost, per unit profit will be: A) \$50. B) \$100. C) \$150. D) \$200. 7 If the long-run market supply curve is perfectly elastic, a rise in demand would cause the final equilibrium to be: A) at the same price but a higher output. B) at a lower price but the same output. C) at a lower price and a higher output. D) at the same price and the same output. 8 (3.0K)Refer to the graph above. If market price increases from \$50 per unit to \$60 per unit, a profit-maximizing perfectly competitive firm will: A) increase output from 65 to 75. B) decrease output from 75 to 65. C) continue to produce the same level of output. D) produce 85 units of output. 9 (3.0K)Refer to the graph above. If the firm is producing 450 units of output, profit is equal to: A) \$130. B) -\$175. C) \$0. D) \$175. 10 (3.0K)Refer to the graph above. If the price of the product is \$4: A) new firms will enter the industry. B) firms will exit the industry. C) the industry will be in long-run equilibrium. D) firms will incur economic losses of approximately \$160 per day.