please make sure you get them all right.
1-If P equals the lowest point on the curve which is derived from dividing TC by Q, then a perfectly competitive firm must be earning economic profit (true or false)
2-If P = VC/Q; then a firm in a perfectly competitive market should stay in the market in the short run even though it loses money (true or false)
3-If a firm in a perfectly competitive market is facing a decreasing AFC; while AVC is increasing; then, ATC must be increasing (true or false)
4-The National Company operates in a perfectly competitive market; its MR is higher than MC at the current level of Q. Then expanding Q will raise TC more than TR (true or false)
5-A firm operating in the long run in a perfectly competitive market should maintain P = ATC to earn normal profit not economic profit (true or false)
6-Each firm in a perfect competitive market faces a demand curve with infinite demand elasticity (true or false)
7-No firm in the long run in a perfectly competitive market can earn economic profit (true or false)
8-At the current production level of 500 units, the ATC is 600 riyals. One concludes that this firm if losing money and can’t earn any profit (true or false)
9-Assume a perfectly competitive market, P = 114 riyals and higher than AVC, Q = 600 units, MC = 114 riyals, and TC = 72,000. This means the firm is suffering losses (true or false)
10-A firm operating in a perfectly competitive market must exit the market if P is below ATC (true or false)
11-Since a firm is a price taker in a perfectly competitive market, then no firm can make economic profit; rather any firm can only make normal profit (true or false)
12-If the MC curve facing a single firm in a perfectly competitive market is increasing but lower than P; then the profit maximizing firm must increase Q (true or false)
13-As more firms enter the industry, the slope of the demand curve facing each firm in a perfectly competitive market does not change (true or false)
14-There are 800 farms in the potatoes sector in a perfectly competitive market. The price is 4 riyals per kilo. This implies the demand curve facing farm number 50 intersects the Q axis at P = 4 (true or false)
15-MC curve facing a single firm in a perfectly competitive market must be negatively sloped as the demand curve (true or false)
16-MC is higher thank P at the current level of production in a perfectly competitive market, then the firm must reduce Q (true or false)
17-If the demand curve faced by a single firm in a perfectly competitive market is infinitely elastic, then the firm must be a price taker (true or false)
18-An economic analyst found MC higher than AVC in the cheese factory. This means this firm earns economic profit (true or false)
19-Assume a perfectly competitive market, where P = 14 riyals and higher than AVC, while MC = 102 riyals, and TC = 72,000 riyals. Then the firm must be earning normal profit not economic profit (true or false)
20-If TC is higher than TR in the short run; then a firm operating in a perfectly competitive market must shut down and exit the market to avoid losses (true or false)
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