Chapter 4

MARKET STRUCTURES

       1. The marginal revenue curve (MR) of a perfectly competitive firm

       A.  Is horizontal at the market price

       B.  Is downward – sloping because price must be reduced to sell    more output

       C.   Is perfectly inelastic because price not depend to the output

       D.   Increase at an increasing rate as output expands

2.The marginal revenue (MR) curve of a monopoly firm

A.      Is horizontal at the market price

 B.      Is downward – sloping because price must be reduced to sell   more output

 C.      Is perfectly inelastic because price not depend to the output

 D.      Increase at an increasing rate as output expands


3.Perfect competition is the situation when

A. Firm are not independent of each other.
B. The industry consists of small number of firms
C. Each firm is a price taker
D.Product has no close substitutes


4.The average revenue curve (AR) of a perfectly competitive firm

    A.      Is horizontal at the market price

    B.      Is downward – sloping because price must be reduced to sell
      more output

    C.      Is perfectly inelastic because price not depend to the output

    D.      Increase at an increasing rate as output expands