Microeconomics Chapter 12 Review

How do you calculate total fixed cost?

AFC x Total output

How do you calculate total variable cost?

TC-TFC

How do you calculate profit?

TR-TC

(See Figure 12-18) 2f. What is the minimum price the firm requires to produce output?

$12; the firm start to shut down where the price is below minimum AVC

(See Figure 12-18) 2g. If the market price is_________ the firm will break even and produce a quantity of ___________.

$20, 150

(See Figure 12-18) 2a. What is the profit or loss at the profit-maximizing output?

$3,200

(See Figure 12-18) 2c. What is the total variable cost at the profit-maximizing output?

$3,900

(See Figure 12-18) 2b. What is the firm's total fixed cost?

$900

(See Figure 12-18) 2e. In long-run equilibrium, what is the firm's profit maximizing quantity? What is the minimum price the firm requires to produce output?

150; price will equal marginal cost

How do you calculate total cost?

ATC x Total output

If in a perfectly competitive industry, the market price facing a firm is below its average total cost but above average variable cost at the output where marginal cost equals marginal revenue A. new firms are attracted to the industry B. firms are breaking even C. some existing firms will exit the industry D. the industry supply will not change

C

The demand curve for an individual seller's product in perfect competition is A. the same as market demand B. vertical C. downward sloping D. horizontal

D

How do you calculate total revenue?

Market price x Profit maximizing output

In the short run, if a firm shuts down it avoids its variable cost but not its fixed cost A. True B. False

True

(See Figure 12-18) 2d. If the market price is $14, should the firm represented in the diagram continue to stay in business?

Yes, the firm's short run supply curve is its MC curve above minimum AVC