In Perfect Competition

question 120

Multiple Choice

In perfect competition

• A)the demand curve facing the firm is a horizontal line at the market price
• B)marginal revenue equals total revenue
• C)total revenue always exceeds variable cost
• D)price always exceeds average total cost
• E)marginal cost always equals average cost

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Definitions:

Probability Tree

A diagram that shows the possible outcomes of a series of related probabilities.

Bayes' Law

A theorem describing the probability of an event based on prior knowledge of conditions that might be related to the event.

P(A|B)

The probability of event A occurring, given that event B has already occurred.

P(B|A)P(A)

Represents the probability of event B given event A has occurred, multiplied by the probability of event A; used in the calculation of joint probabilities.