Need help with these . thanks! If firms within a perfectly competitive market ar

Question

Need help with these . thanks!

If firms within a perfectly competitive market are earning profits in the short-run, we would expect additional firms to enter that market as it approaches the long-run. A. True. B. False.

A profit maximizing monopolist will always seek to charge a price equal to their marginal cost. A. True. B. False.

A perfectly competitive market maximizes the welfare, as measured by total surplus, of all participants in the market. A. True. B. False.

The profit maximization condition for a firm is to set its total revenue equal to its total costs. A. True. B. False.

Explanation / Answer

1. If firms within a perfectly competitive market are earning profits in the short-run, we would expect additional firms to enter that market as it approaches the long-run.: True

Explanation: Since free entry and exit is the characteristic of perfect competition, if existing firm earns positive economic profit in short run, new firms wiill be attrected by this positive economic profit and enters into the industry.

2. A profit maximizing monopolist will always seek to charge a price equal to their marginal cost.: False

Explanation: A monopolist always sets price higher than Marginal cost

3. A perfectly competitive market maximizes the welfare, as measured by total surplus, of all participants in the market.: True.

4. The profit maximization condition for a firm is to set its total revenue equal to its total costs.: False.

Explanation: The profit maximization condition for a firm is to set its marginal revenue equal to its marginal costs

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