ECO561 Week 3
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A purely- or perfectly-competitive firm would be characterized bywhich of the following?
Hint : The different types of firms include pure competition, pure monopoly, monopolisticcompetition, and oligopoly.A. Large number of firms, price taker, free entry and exit, and standardized productB. Large number of firms, price maker, free entry and exit, and a differentiated productC. Small number of firms, price maker, limited entry and exit, and a standardized productD. One firm, price maker, limited entry and exit, and a unique product
2. For a purely-competitive firm, price must be
Hint : In a purely competitive firm the revenue received for the first unit is the same as that of thelast unit sold, which is the same as that which will be received for the next unit sold.
A. equal to marginal revenue and average revenueB. greater than marginal revenue and average revenueC. greater than marginal revenue, and equal to average revenueD. less than both marginal revenue and average revenue