ch. 9 test prep prt 2

e.There is not enough information to answer the question.

At the profit-maximizing output level, average fixed cost is

d.74 units The perfectly competitive firm will maximize profits at the level of output where marginal revenue equals marginal cost. In perfect competition, where the firm faces a horizontal demand curve, price is constant and is equal to marginal revenue. The profit-maximizing level of output would occur at the level of output where marginal cost equals $10. The marginal cost of the 74th unit is $10, thus the firm is maximizing profits at that level of production.

Based on the information in the table , how many units should the profit-maximizing perfectly competitive firm produce? a.71 units b.72 units c.73 units d.74 units e.75 units

e. b. and d.

If the firm produces Q2, is it guaranteed to earn a profit? a.Yes, because it is producing at the quantity of output at which MR = MC. b.No, because the highest price it charges may end up being less than average total cost. c.Yes, because it has maximized the positive difference between MR and MC. d.Yes, because it continues to produce as long as MR is greater than MC. e. b. and d.

b.No, because the highest price it charges may end up being less than average total cost.

If the firm produces Q2, is it guaranteed to earn a profit? a.Yes, because it is producing at the quantity of output at which MR = MC. b.No, because the highest price it charges may end up being less than average total cost. c.Yes, because it has maximized the positive difference between MR and MC. d.Yes, because it continues to produce as long as MR is greater than MC. e.none of the above.

b.No, because the highest price it charges may end up being less than average total cost. d.Yes, because it continues to produce as long as MR is greater than MC.

If the firm produces Q2, is it guaranteed to earn a profit? a.Yes, because it is producing at the quantity of output at which MR = MC. b.No, because the highest price it charges may end up being less than average total cost. c.Yes, because it has maximized the positive difference between MR and MC. d.Yes, because it continues to produce as long as MR is greater than MC. e.none of the above.

b.$10, $6.25, there is not enough information to answer

Refer to the exhibit and assume that the quantity sold is equal to the quantity produced. At a quantity of 16 units, price is ____________ and ATC is _________ and AVC is ______________. a.$10, $6.25, $3.75 b.$10, $6.25, there is not enough information to answer c.$10, $4.25, $3.75 d.$10, $5.50, there is not enough information to answer e.$10, $15, $4

a.$12, $12, $12, $12

The dollar amounts that go in blanks A through D are, respectively, a.$12, $12, $12, $12 b.$5, $6, $7, $8 c.$10, $10, $4, $40 d.$5, $5, $14, $14 e.There is not enough information to answer the question.

b.60, $6, $60

The perfectly competitive, profit-maximizing firm will produce ____ units of output, charge a price of _______ per unit, and earn a profit of _____________. a.50, $5, $300 b.60, $6, $60 c.30, $5, $200 d.70, $6, $0 e.none of the above

c.$3 Profit is the difference between TR (P x Quantity Sold) and TC. The maximum profit that this firm can earn is: [($9 x 14) - 123] = $3.

What is the maximum profit this firm can earn? a.$1 b.$2 c.$3 d.$4 e.There is no level of output at which the firm can earn a profit.

b.Q2, where the difference between "what is coming in" on the last unit and "what is going out" is zero.

What quantity does the profit-maximizing or loss-minimizing firm produce? a.Q1, where "what is coming in" on the last unit is greater than "what is going out." b.Q2, where the difference between "what is coming in" on the last unit and "what is going out" is zero. c.Q3, where marginal cost is greater than marginal revenue. d.Q4, which maximizes the excess of marginal cost over marginal revenue. e.There is not enough information to answer this question.

d.14 units The perfectly competitive firm should continue to produce up to the point where the marginal revenue received from selling another unit is equal to the marginal cost of producing that unit. Marginal revenue is the change in total revenue resulting from selling one more unit and marginal cost is the change in total cost resulting from producing another unit. The marginal revenue of producing each additional unit is $9. The marginal cost of producing the 14th unit is $9 and marginal cost is rising, so the firm should produce 14 units of the good.

What quantity of output should the profit-maximizing firm produce and sell? a.11 units b.12 units c.13 units d.14 units e.15 units

d.14 units The perfectly competitive firm should continue to produce up to the point where the marginal revenue received from selling another unit is equal to the marginal cost of producing that unit. Marginal revenue is the change in total revenue resulting from selling one more unit and marginal cost is the change in total cost resulting from producing another unit. The marginal revenue of producing each additional unit is $9. The marginal cost of producing the 14th unit is $9 and marginal cost is rising, so the firm should produce 14 units of the good.

What quantity of output should the profit-maximizing firm produce and sell? a.11 units b.12 units c.13 units d.14 units e.15 units

d.15

What quantity of output would the profit-maximizing firm produce? a.12 b.13 c.14 d.15 e.There is not enough information to answer the question.