Costs and Market Price

Any typo or mistake is on me. Any questions, email me.

xgu@econ.rutgers.edu

Econ 102: Sec.07 Problem Set #6: Due on Tuesday, 26-April-2011 Note: 1. Do it LOL. Do it independently. Do it carefully. 2. Write your answer on the answer sheet attached (last page). I only collect the answer sheets on Tuesdays, before the class begins. So you can keep the questions. And if you cannot make Tuesday class, please send me your answers via email before Tuesday class ends. Use attachments, please. 3. Good Luck!

1. In a competitive market, the actions of any single buyer or seller will
a. have a negligible impact on the market price. b. have little effect on market equilibrium quantity but will affect market equilibrium price. c. affect …show more content…

positive economic profits. b. negative economic profits but will try to remain open. c. negative economic profits and will shut down. d. zero economic profits.

16.

Refer to Figure 14-1. competitive firm will earn

If the market price is P4, in the short run, the perfectly

Any typo or mistake is on me. Any questions, email me.

xgu@econ.rutgers.edu

a. b. c. d.

positive economic profits. negative economic profits but will try to remain open. negative economic profits and will shut down. zero economic profits.

Figure 14-5
Price

MC ATC AVC

P5 P4 P3 P2 P1

Q1

Q2

Q3

Q4

Quantity

17.

Refer to Figure 14-5. When market price is P3, a profit-maximizing firm's total revenue a. can be represented by the area P3 Q3. b. can be represented by the area P3 Q2. c. can be represented by the area (P3-P2) Q3. d. is zero.

18.

Refer to Figure 14-5. When market price is P3, a profit-maximizing firm's profit a. can be represented by the area P3 Q3. b. can be represented by the area P3 Q2. c. can be represented by the area (P3-P2) Q3. d. is zero.

19. Refer to Figure 14-5. When market price is P3, a profit-maximizing firm's total costs
a. b. c. d. can be represented by the area P2 Q2. can be represented by the area P3 Q2. can be represented by the area (P3-P2) Q3. are zero.

20.

Refer to Figure 14-5. Firms will be encouraged to enter this market for all