Econ160: Chapter 11, Pure Competition in the Long Run

The term allocative efficiency refers to:

Entrepreneurs in purely competitive industries:

Refer to the diagram showing the average total cost curve for a purely competitive firm. At the long-run equilibrium level of output, this firm's total revenue:

Refer to the diagram. At output level Q1:

Long-run competitive equilibrium

The process by which new firms and new products replace existing dominant firms and products is called:

Suppose losses cause industry X to contract and, as a result, the prices of relevant inputs decline. Industry X is:

Creative destruction is:

If the long-run supply curve of a purely competitive industry slopes upward, this implies that the prices of relevant resources:

Allocative efficiency occurs whenever:

Refer to the diagram. Line (2) reflects the long-run supply curve for:

Allocative efficiency is achieved when the production of a good occurs where:

If production is occurring where marginal cost exceeds price, the purely competitive firm will:

The term productive efficiency refers to:

Refer to the diagram. Line (1) reflects a situation where resource prices:

In a decreasing-cost industry:

Creative destruction is least beneficial to:

Refer to the diagram. Line (2) reflects a situation where resource prices:

Refer to the diagram. Line (1) reflects the long-run supply curve for:

Assume a purely competitive firm is maximizing profit at some output at which long-run average total cost is at a minimum. Then:

Refer to the diagrams, which pertain to a purely competitive firm producing output q and the industry in which it operates. In the long run we should expect:

The theory of creative destruction was advanced many years ago by:

Which of the following outcomes is consistent with a purely competitive market in long-run equilibrium?

Under what conditions would an increase in demand lead to a lower long-run equilibrium price?

When a purely competitive firm is in long-run equilibrium:

Because the equilibrium position of a purely competitive seller entails an equality of price and marginal costs, competition produces an efficient allocation of economic resources.

Refer to the diagram. If this competitive firm produces output Q, it will:

A constant-cost industry is one in which:

Assume that a decline in consumer demand occurs in a purely competitive industry that is initially in long-run equilibrium. We can:

Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs. After all economic adjustments have been completed, product price will be:

Assume a purely competitive, increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will:

Which of the following is true concerning purely competitive industries?

If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then:

If for a firm P = minimum ATC = MC, then:

Marginal cost is a measure of the alternative goods that society forgoes in using resources to produce an additional unit of some specific product.

A constant-cost industry is one in which:

Which of the following statements is correct?

A purely competitive firm is precluded from making economic profits in the long run because:

Refer to the diagram. If this firm is producing at the profit-maximizing level of output in the short run, then it is achieving productive and allocative efficiency.

Suppose an increase in product demand occurs in a decreasing-cost industry. As a result: