1. Which of the following is not a characteristic of a monopolistically competitive market structure?

A. There are low barriers to entry of new firms

B. There is a large number of independently acting small sellers

C. All sellers sell products that are differentiated

D. each firm must react to actions of other firms

2. If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is

A. $5

B. $12.50

C. $25

D. $125

3. Both individual buyers and sellers in perfect competition

A. have the market price dictated to them by government

B. can influence the market price by their own individual actions

C. can influence the market price by joining with a few of their competitors

D. have to take the market price as a given

4. If a perfectly competitive firm's price is above its average total cost, the firm

A. is breaking even

B. is incurring a loss

C. is earning a profit

D. should shut down

5. True of False? A perfectly competitive firm's marginal revenue curve is downward sloping.

6. If a perfectly competitive firm's price is less than its average total cost but greater than its average variable cost, the firm

A. should shut down

B. Is incurring a loss

C. is earning a profit

D. is breaking even