Econ Homework 6

Total revenue equals

price × quantity.

Table 14-7 A firm in a competitive market has the following cost structure:

produce 5 units of output in the short run and face competition from new market entrants in the long run.

The following table presents cost and revenue information for a firm operating in a competitive industry. ​

$480

The table represents a demand curve faced by a firm in a competitive market.

as many units as possible.

Tom produces commemorative t-shirts in a competitive market. If Tom decides to decrease his output, this will

decrease his revenue, since his output has decreased and the price remains the same.

Refer to Table 13-9. The average variable cost of producing 240 units is

$0.19

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that the average total cost when 5 units of output are produced is $80, and the marginal cost of the sixth unit of output is $160. What is the average total cost when six units are produced?

$93.33

The firm should not produce an output level beyond

5 units.

Table 13-10Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.

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Refer to Figure 13-5. Which of the following statements is correct?

Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost.

When a factory is operating in the short run,

it cannot adjust the quantity of fixed inputs.

If marginal cost is rising,

marginal product must be falling.

Total cost is the

market value of the inputs a firm uses in production

When profit-maximizing firms in competitive markets are earning profits,

new firms will enter the market.

Curve D is always declining because

we are dividing fixed costs by higher and higher levels of output.