Module 8 quiz econ

Refer to the diagram. At the profit-maximizing output, total fixed cost is equal to:

BCFG.

The following table applies to a purely competitive industry composed of 100 identical firms. Refer to the table. For each of the 100 firms in this industry, marginal revenue and total revenue will be:

$3 and $18,000, respectively.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: Refer to the data. If there were 1,000 identical firms in this industry and total or market demand is as shown below, equilibrium price will be:

$36.

Answer the question on the basis of the following data confronting a firm: Refer to the data. At the profit-maximizing output, the firm's total revenue is:

$48.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for this firm's product is $87, it will produce:

9 units at an economic profit of $281.97.

Which of the following statements applies to a purely competitive producer?

It will not advertise its product.

In the short run, a purely competitive firm will always make an economic profit if:

P > ATC.

Refer to the diagram. The firm will shut down at any price less than:

P1.

Which of the following is characteristic of a purely competitive seller's demand curve?

Price and marginal revenue are equal at all levels of output.

Price is constant to the individual firm selling in a purely competitive market because:

each seller supplies a negligible fraction of total supply.

Refer to the diagram for a purely competitive producer. If product price is P3:

economic profits will be zero.

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Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation:

is realizing an economic profit of $40.

(Consider This) An unprofitable motel will stay open in the short run if:

price (average nightly room rate) exceeds average variable cost.

The Ajax Manufacturing Company is selling in a purely competitive market. Its output is 100 units, which sell at $4 each. At this level of output total cost is $600, total fixed cost is $100, and marginal cost is $4. The firm should:

produce zero units of output.

Refer to the diagram. The short-run supply curve for this firm is the:

segment of the MC curve lying to the right of output level h.

Answer the question on the basis of the following cost data for a purely competitive seller: Refer to the data. If product price is $25, the firm will:

shut down and incur a $50 loss.

Refer to the diagram. At P4, this firm will:

shut down in the short run.

(Last Word) Temporary shutdowns of firms are most widespread when:

the economy experiences recession.

A firm reaches a break-even point (normal profit position) where:

total revenue and total cost are equal.

DASH Airlines is considering the addition of a flight from Red Cloud to David City. The total cost of the flight would be $1,100, of which $800 are fixed costs already incurred. Expected revenues from the flight are $600. DASH should:

add this flight because marginal revenue exceeds marginal costs and total revenue exceeds total variable cost.