Econ 2010 Quiz 10, 9
in order to maximize profit, the firm will produce a level of output where both marginal revenue and marginal cost is equal to
$8
when a profit maximizing firm is earning profits, those profits can be identified by
(P-ATC)xQ
a market is competitive if
(ii) and (iii) only -each buyer is small compared to the market -each seller is small compared to the market
what is the average revenuw when sally sells 7 pairs of shoes
100
to maximize profit, a monopolist would choose which of the following outcomes
100 units of output and a price of $40 per unit
in the long run, a profit maximizing firm will choose to exit a market when
total revenue is less than total cost
to maximize total surplus, a competitive market would choose which of the following outcomes
150 units of output and a price of $30 per unit
assume a firm in a competitive industry is producing 800 units of output and it sells each unit for $6, It average total cost is $4. Its profit is
1600
what is the marginal revenue from selling the 8th pair of shoes
20
what is total profit at the profit maximizing quantity
265
what is the total variable cost of production when sally produces 6 pairs of shoes
295
at which quantity of output is marginal revenue equal to marginal cost
5 units
the deadweight loss caused by profit maxing monopoly amounts to
500
sally will maximise her profits by selling
6 pairs of shoes
what is the marginal cost of the 6th pair of shoes
60
what is the total revenue from selling 6 pairs of shoes
660
in the long run, each firm in a competitive industry earns
zero economic profits
if the firm doubles its output from 3 to 6 units, total revenue will
increase by exactly $15
the entry of new firms into a competitive market will
increase market supply and decrease market price
if the firm's marginal cost is $5 it should
increase production to maximize profit
which of the following is an example to barrier to entry
roseanne obtains a copyright for a short story that she wrote and published
Mrs. Smith operates a business in a competitive market. The current market price is $7.50. At her profit max level of production, the average variable cost is $8 and the average total cost is $8.25. Mrs. Smith should
shut down in both the short and long run
sally owns the only shoe store in town. she has the following cost and revenue information qhat are dally's fixed cost?
$100
which of the following is not correct
a monopolist can charge any price and sell any quantity that it chooses
if a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost then
a one unit increase in output will increase the firm's profit
drug companies are allowed to be monopolist in the drugs they discover in order to
all of the above -increase the availability of expensive but useful medications -encourage research -increase over welfare of society through better health because drug companies continually produce better medication
over which range of output is average revenue equal to price
average revenue is equal to price over the entire range of output
in the long run equilibirum of competitive market, the number of firms in the market adjusts unti the market demand is satisfied at a price equal to the minimum of
average total cost of the marginal firm
the fundamental source of monopoly power is
barriers to entry
the price and quantity relationship in the taable is most likely a demand curve faced by a firm in a
competitive market
in the long run equilibrium of a market with free entry and exit if all firms have the same cost structure then
firms are operating at their efficient scale
in the short run, a firm operating in a competitive industry will shut down if pruce
less than average variable cost
a monopolist produces
less than the socially efficient quantitiy of output but at a higher price than in a competitive market
a perfectly competitive firm produces where
marginal cost equals price, while a monopolist produces where price exceeds marginal cost
over what range of output is marginal revenue declining
marginal revenue is constant over the entire range of output
because a monopolist must lower its price ni order to sell another unit of output
marginal revenue is less than price
which of the following statements is NOT correct
monopolists typically produce larger quantities of output than competitive firms
when a firm's average total cost curve continually declines, the firm is
natural monopoly
a firm that exits its market has to pary
neither its variable costs nor its fixed costs
for a certain firm, the 100th unit of output that the firm produces has a marginal revenue of $11 and MC of $10. It follows that
production of the 100ths unit of output increases the firm;s profit by $1
if the firm's marginal cost is $11, it should
reduce production to increase profit
which of the following statements is corrected regarding a firm's decision making?
the decision to shut down is a short run decision, whereas the decision to exit is a long run decision
in a comp market, the current price is $5. typical firm in market has a ATC= 5 and a AVC $4.50
the firm will earn zero profits in both the short and long run
for a firm operating in a competitive industry, which of the following statements is not correct
total revenue is constant
suppose that a firm in a competitive market faces the following revenue and costs if the firm produces 3 units of output
total revenue is greater than variable cost