23. Which two characteristics of perfect competition make it impossible for a perfectly competitive firm to have an economic profit in the long run?
A. easy entry/exit and perfect information
B. homogeneous product and easy entry/exit
C. perfect information and homogeneous product
D. perfect information and many buyers/sellers
24. Which term describes the situation in which a firm increases its use of all inputs by the same percentage and its output increases by a smaller percentage?
A. decreasing marginal cost
B. decreasing marginal returns
C. decreasing returns to scale
D. decreasing marginal utility
25. You are told the following information for a perfectly competitive firm: It is producing at the output where MR = MC, and at that output, P = ATC. Which of the following statements is correct?
A. The firm has an economic break even and should stay open in the short run.
B. The firm has an economic break even and should shut down in the short run.
C. The firm has an economic break even, but more information is needed to know if it should stay open or shut down in the short run.