Lesson 4.1.1

4.1.1 Perfect competition: short run, long run and efficiency Quiz: OCR Economics, Unit 4

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.1.1, Perfect competition: short run, long run and efficiency: 20 multiple choice questions for the OCR Economics (H460), Unit 4: Market structures, written with Revision Ninja.

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The 20 questions

  1. What shape is the demand curve facing an individual firm in perfect competition?

    • Upward sloping
    • Downward sloping
    • Vertical
    • Horizontal

  2. At what point does a profit-maximising firm in perfect competition choose to produce?

    • P = AC
    • MR = MC
    • AR = AC
    • MR = 0

  3. Which type of profit do firms in perfect competition make in the long run?

    • Supernormal profit
    • Monopoly profit
    • Normal profit
    • Subnormal profit

  4. Which condition must be met for a firm to achieve allocative efficiency?

    • MC = AC
    • MR = 0
    • P = AC
    • P = MC

  5. At which point on the average cost curve is productive efficiency achieved?

    • Lowest point
    • Highest point
    • Slope is negative
    • Slope is positive

  6. Why do firms in perfect competition fail to achieve dynamic efficiency?

    • High entry barriers
    • Excess market power
    • No supernormal profit
    • Product differentiation

  7. What is the price elasticity of demand for a firm in perfect competition?

    • Relatively inelastic
    • Infinitely elastic
    • Perfectly inelastic
    • Unit elastic

  8. How many buyers and sellers exist in a perfectly competitive market?

    • Very many
    • Few sellers
    • One seller
    • Single buyer

  9. If the market price is £12, what is the marginal revenue for a competitive firm?

    • £0
    • £6
    • £12
    • £24

  10. What happens to market supply when existing competitive firms earn short-run supernormal profit?

    • Supply decreases
    • Demand increases
    • Supply increases
    • Supply stays constant

  11. In the short run, a firm should shut down immediately if price falls below what?

    • Marginal cost
    • Average variable cost
    • Average total cost
    • Fixed cost

  12. In the long run, a firm will exit the market if price remains below what?

    • Marginal revenue
    • Average total cost
    • Average variable cost
    • Fixed cost

  13. What term describes the identical nature of goods produced in perfect competition?

    • Homogeneous
    • Differentiated
    • Branded
    • Heterogeneous

  14. What assumption ensures that all consumers and producers have complete market knowledge?

    • Asymmetric information
    • Imperfect information
    • Perfect information
    • Bounded rationality

  15. What is the barrier to entry level in a perfectly competitive market?

    • Absolute barriers
    • Zero barriers
    • High barriers
    • Moderate barriers

  16. Which curve forms an individual firm's short-run supply curve above average variable cost?

    • Average cost curve
    • Demand curve
    • Total cost curve
    • Marginal cost curve

  17. If market price is £20, what is the average revenue for a firm selling 5 units?

    • £4
    • £20
    • £100
    • £5

  18. What type of efficiency is guaranteed in the long run because firms minimise costs to survive?

    • Allocative inefficiency
    • X-efficiency
    • Macroeconomic efficiency
    • Dynamic efficiency

  19. What happens to consumer surplus when a market moves into long-run competitive equilibrium?

    • Halved
    • Maximised
    • Eliminated
    • Minimised

  20. Which mathematical relationship holds true for a competitive firm in long-run equilibrium?

    • P = MR > AC
    • P = MR = MC = AC
    • MR = MC > P
    • P > MR = MC

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