The Following Figures Show the Demand and Cost Curves of a Perfectly

question 18

Multiple Choice

The following figures show the demand and cost curves of a perfectly competitive and a monopoly firm respectively. Figure 10.7 D: Average Revenue
AC: Average cost
MC: Marginal cost
MR: Marginal cost
Refer to Figure 10.7.If the perfectly competitive industry and the monopoly produces the same quantity, then:

• A)there are 10 firms in the perfectly competitive industry.
• B)there are 800 firms in the perfectly competitive industry.
• C)there are 1, 000 firms in the perfectly competitive industry.
• D)there are 2, 000 firms in the perfectly competitive industry.
• E)there are 100 firms in the perfectly competitive industry.

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Definitions:

Leverage Ratio

A financial ratio indicating the level of debt used by a business to finance its assets and operations.

Interest Burden

The impact of interest expenses on a company's earnings, often expressed as a ratio or percentage of earnings before interest and taxes.

Return-On-Sales Ratio

A profitability metric that calculates the efficiency of a company in converting sales into profits, indicating how much of each dollar of sales is translated into profit.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company’s assets to create profits.