Question : 41) If a firm in a perfectly competitive market faces : 1241229

41) If a firm in a perfectly competitive market faces an equilibrium price of $5, its marginal revenue

A) will be greater than $5.

B) will be less than $5.

C) maybe either greater or less than $5.

D) will also be $5.

E) will be any amount but $5.

42) If demand for a seller’s product is perfectly elastic, which of the following is true?

i.The firm will sell no output if it sets the price its product above the market price.

ii.There are many perfect substitutes for the seller’s product.

iii.The firm will sell no output if it sets the price its product below the market price.

A) i only

B) ii only

C) iii only

D) i and ii

E) ii and iii

43) Cynthia is an Oklahoma wheat farmer. The demand for her wheat is

A) perfectly inelastic.

B) inelastic but not perfectly inelastic.

C) elastic but not perfectly elastic.

D) perfectly elastic.

E) unit elastic.

44) Because perfectly competitive firms are price takers, each firm faces a demand that is

A) perfectly inelastic.

B) perfectly elastic.

C) highly inelastic but never is it perfectly inelastic.

D) unit elastic.

E) highly elastic but never is it perfectly elastic.

45) If a perfectly competitive firm raised the price of its product,

A) its profits would increase.

B) the quantity of output it sells decreases to zero.

C) rival firms will follow suit and raise their prices also.

D) the firm will be forced to advertise more.

E) its total revenue would rise but its total cost would rise by more.

46) If the wheat industry is perfectly competitive with a market price of $4 per bushel and Farmer Brown charged $5 per bushel, how many bushels would Farmer Brown sell?

A) some, but fewer than he would at a price of $4

B) more than he would at a price of $4

C) just as many as he would at a price of $4

D) none

E) More information is needed about the prices charged by the other wheat farmers.

47) How does the demand for any one seller’s product in perfect competition compare to the market demand for that product?

A) They are identical.

B) The demand for any one seller is proportionally smaller but otherwise identical to the market demand.

C) The demand for any one seller’s product is perfectly elastic while the market demand curve is downward sloping.

D) There is no demand for any one seller’s competitively sold product.

E) The demand for any one seller’s product is not perfectly elastic while the market demand is perfectly elastic.

48) For the perfectly competitive broccoli producers in California, the market demand curve for broccoli is

A) a horizontal line.

B) downward sloping.

C) nonexistent.

D) upward sloping.

E) the same as the demand curve each firm faces.

49) The market demand curve in a perfectly competitive market is ________ and the demand curve for a perfectly competitive firm’s output is ________.

A) downward sloping; downward sloping

B) downward sloping; horizontal

C) horizontal; downward sloping

D) horizontal; horizontal

E) downward sloping; upward sloping

50) Elsie is a perfectly competitive dairy farmer. The market price of milk was $2.40 but just fell to $2.20 a gallon. Elsie

A) can sell as much milk as she wants at $2.20 a gallon.

B) will have to charge some customers $2.40 a gallon to stay in business.

C) will produce the same amount of milk at both prices.

D) can sell more at the lower price because the quantity demanded is higher at lower prices.

E) will be able to charge her initial customers $2.40 a gallon.