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QUESTION 1 When marginal revenue equals marginal cost, A.economic profit is zero.the firm is producing the maximum amount of output possible.the firm...
QUESTION 1
- When marginal revenue equals marginal cost,
- A.economic profit is zero.
- B.the firm is producing the maximum amount of output possible.
- C.the firm is minimizing the costs of production.
- D.the firm is producing the profit-maximizing level of output.
- E.the firm should be merged with a larger, more profitable company.
- In the short run, if a profit-maximizing firm is incurring losses it will
- A.shut down.
- B.go out of business.
- C.produce if it can cover its fixed costs.
- D.produce if total revenue exceeds total variable cost.
- E.produce a positive amount that is less than that which equates marginal revenue with marginal cost.
10 points
QUESTION 3- In the short run, a firm attempting to minimize losses
- A.must leave the industry in order to maximize opportunity costs.
- B.will produce as long as marginal cost equals marginal revenue.
- C.will produce as long as total revenue exceeds total variable cost.
- D.will produce as long as total revenue exceeds total fixed cost.
- E.will produce as long as competitors continue to produce.
10 points
QUESTION 4- This table shows the total costs for various levels of output for a firm operating in a perfectly competitive market.
- According to the table shown, the firm's marginal revenue:
- A.is constant.
- B.increases as output increases.
- C.decreases as output increases.
- D.increases until the 3rd unit, then decreases.
10 points
QUESTION 5- The marginal-revenue curve facing a firm is equivalent to the market-demand curve in the case of perfect competition.
- A.True
- B.False
10 points
QUESTION 6- A perfectly competitive firm's profit per unit of output can be determined by the amount by which the demand curve facing the firm lies above the marginal-cost curve at the profit-maximizing output level.
- A.True
- B.False
10 points
QUESTION 7- Reference: Ref 24-2
- In the figure above, what are total fixed costs at the profit-maximizing output level?
- A.$175
- B.$180
- C.$270
- D.$300
- E.$330
10 points
QUESTION 8- Reference: Ref 24-3
- In the figure above, at the profit-maximizing output level, which of the following is true?
- A.The firm is making a profit of $10 per unit.
- B.The firm is making a profit of $45 per unit.
- C.The firm is losing $35 per unit.
- D.The firm is losing $10 per unit.
- E.The firm is breaking even.
10 points
QUESTION 9- Reference: Ref 24-3
- In the figure above, to maximize profits or minimize losses the firm should produce __________ units.
- A.4
- B.10
- C.15
- D.20
- E.28
10 points
QUESTION 10- According to the graph shown, at point C the firm is earning:
- A.fewer profits than at point B, and they should produce less.
- B.higher profits than at point B, and they should produce more.
- C.fewer profits than at point B, and they should produce more.
- D.higher profits than at point B, and they should produce less.
10 points
QUESTION 11- A perfectly competitive firm should shut down if
- A.the demand curve facing the firm lies above the minimum point on its ATC curve.
- B.P is less than MC
- C.the demand curve facing the firm lies below the minimum point on its AVC curve.
- D.P is greater than MC
- E.the demand curve facing the firm lies below the minimum point on its ATC curve but above the minimum point on its AVC curve.