Question 11 A perfect competitor can reap an economic profit in the short run bu

Question

Question 11

A perfect competitor can reap an economic profit in the short run but not in the long run.

True

False

Question 12

Economic profit involves total revenue minus the total costs, with total cost measured as the opportunity costs of production.

True

False

Question 13

To affect sales, a monopolistic competitor can lower price or differentiate the product.

True

False

Question 14

A firm may become a monopoly if it controls the entire supply of a basic input required to manufacture a product, has exclusive rights to make a product or use a particular process, and/or is awarded a market franchise by a government agency.

True

False

Question 15

Since there is free mobility of resources, the perfect competitor can freely move in and our of a given perfectly competitive market.

True

False

Question 16

Economic profit involves explicit costs, while accounting profits involve implicit costs.

True

False

Question 17

A firm in a perfectly competitive industry may incur a short-term loss and yet continue producing in order to minimize losses.

True

False

Question 18

The demand which a monopolist is faced with is also the market demand for the product.

True

False

Question 19

The average total cost curve on a graph will be found below the average variable cost curve.

True

False

Question 20

A monopolistic competitor produces a differentiated product having numerous close substitutes.

True

False

Explanation / Answer

11.

True. Perfect competitor can gain profit in short and long run.

12.

True. Economic profit refers to the difference between total monetary revenue and total costs. Here, total costs include both explicit and implicit costs. Economic profit includes the opportunity costs associated with production.

13.

True-a monopolistic competitor can lower price or differentiate the product to maximize the sells.

14.False-

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