Perfectly competitive market - Jamb Economics Past Questions and Answers

Question 11:

• JAMB 1981

Which of the following statements does NOT describe a situation of perfect competition?

A. The firm faces an infinitely elastic demand curve
B. The firm makes no pure profit in the short run
C. The price does not change with changes in the output level of the firm
D. There is freedom of entry into and exit out of , the industry
E. The firm can sell all it produces at the market price

Question 12:

• JAMB 1982

Full equilibrium under perfect competition requires that?

A. MC =MR and AC =AR
B. MC = MR but AR>AC
C. MR =MC =AR=AC
D. TR>TC
E. MR=MC

Question 13:

• JAMB 1983

In perfect competition a firm's price is equal to its marginal revenue which is again equal to average revenue. This form maximizes its profits when its marginal cost (MC) is equal to price (p). Which of the curves in the diagram below represents the firm's marginal cost (MC)?

A. Curve I
B. Curve ll
C. Curve lll
D. Curve lV
E. Curves l and lll

Question 14:

• JAMB 1984

A perfectly competitive firm does not influence the demand for its commodities by lowering its price below the market price because?

A. It is illegal price cutting
B. Other competitors will be angry
C. Total revenue will decline due to its elastic demand curve
D. It is able to sell all it wants at the market price
E. It does not maximize profit

Question 15:

• JAMB 1985

Under perfect competition, the long-run equilibrium requires?

A. MR = MC
B. MR = AC = AR
C. MR > MC
D. MR = MC = AR = AC
E. AR = AC