Business economics and competition - OCR A-Level Economics (H460) quiz

Marginal cost equals marginal revenue

Marginal revenue falls to exactly zero output

Average variable cost reaches its lowest point

Total revenue is pushed to its highest level

Firms find it impossible to calculate their marginal cost

Owners and managers have different goals and information

There are simply far too many rival competitors present

The product is a perfectly homogeneous one

Long-run average cost keeps falling steadily as the total level of output rises over time

All competing firms in the industry will eventually make losses and exit

Adding a variable factor to a fixed factor eventually lowers marginal product

Average fixed cost rises continually as output expands

A skilled local labour pool created by industry growth

A government subsidy

A fall in the market price

Bulk-buying discounts as the firm expands

The minimum return needed to keep the firm in the market

Exactly zero accounting profit recorded in the firm's books

Any profit earned above the prevailing competitive level

Total revenue minus the firm's fixed costs only

Earns supernormal profit

Earns only normal profit

Always makes a loss

Sets price above marginal cost

There are always a very large number of competing rival firms actively operating in it

The government directly sets every single price charged in the market

Barriers to entry and exit are low, so the threat of entry disciplines incumbents

Every firm in it must sell a strictly homogeneous product

It always produces at the minimum point of its average cost curve

It deliberately sets its price exactly equal to marginal cost

It always makes a persistent economic loss

It sets price above marginal cost, so output is too low

A homogeneous product sold at a single price

Market power

The ability to separate markets and prevent resale

Different price elasticities of demand between groups

A single dominant seller serving the whole market

Interdependence between a few large firms

Many small firms all selling a homogeneous product

A complete absence of any barriers to entry

Workers personally derive their utility from the act of working

It is always completely and perfectly inelastic at any wage

It depends on the demand for the goods that labour produces

It is set entirely by powerful trade unions

Always raise total employment in the market

Have no measurable effect on the labour market at all

Lower the wage actually paid to those still in work

Create excess supply of labour (unemployment)