Quiz 2 Micro Economics Chp 8 And Chp 9

The statement "Firm under imperfect market is called price taker" is false. In an imperfect market, a firm has some degree of market power and can influence the price of its product. A price taker, on the other hand, is a firm in a perfectly competitive market that has no market power and must accept the prevailing market price. Therefore, the correct answer is false.

The correct answer, MR=MC, refers to the profit-maximizing condition under perfect competition. In this scenario, a firm maximizes its profits by producing at a level where marginal revenue (MR) equals marginal cost (MC). This means that the additional revenue gained from producing one more unit is equal to the additional cost incurred. By producing at this level, the firm ensures that it is maximizing its profits and not incurring any unnecessary costs.

The statement "Monopoly offers a homogeneous product" is false. In a monopoly, there is only one seller in the market, giving them control over the price and quantity of the product they offer. However, this does not mean that the product is necessarily homogeneous. A homogeneous product refers to a product that is identical across all sellers in the market. In a monopoly, the product can still have variations or unique features, even though there is no competition.

A constant cost industry is one where the cost of production remains the same regardless of the level of output. In the case of the textile and service-based industries, the cost of producing textiles or providing services does not increase or decrease significantly as production levels change. This could be due to factors such as stable input prices, efficient production processes, or economies of scale. Therefore, these industries can be considered examples of constant cost industries.