Pure competition

A purely competitive seller's demand curve coincides with all of the following except

the industry demand curve

Firms in purely competitive markets:

are "price takers"

Compared to the downward-sloping demand curve for the output of a competitive industry, a single firm operating in that industry faces

a perfectly elastic demand curve

Which of the following is a characteristic of equilibrium in long-run competitive markets?

Total consumer and producer surplus is maximized

The market for which of the following most closely approximates pure competition?

Feed corn

The economic profits of firms in long-run competitive equilibrium are:

zero

An industry comprised of many firms, each of which is engaged in substantial nonprice competition is an example of:

monopolistic competition

Economic profit per unit is equal to:

P - Average Total Costs

Economists assume that firms seek to maximize:

Economic Profit

Pure competition is characterized by all of the following except:

positive long-run economic profits

Competitive firms maximize

total profits by producing where price equals marginal cost

Suppose a decrease in product demand occurs in a decreasing-cost industry. Compared to the original equilibrium the new long-run competitive equilibrium will entail:

a higher price and a lower total output

Price-taking behavior is a feature of

pure competition

For all values above minimum average variable cost, a competitive firm's:

supply curve is coincident with its marginal cost curve

A purely competitive firm's output is currently such that its marginal cost is $225 and rising. Its marginal revenue is $210. Assuming profit maximization, this firm should:

leave price unchanged and cut production

In the long run, competitive markets achieve:

allocative efficiency because P = min ATC but not productive efficiency because P > min AVC