In the short run , a profit -maximizing firm will produce additional units of a product as long as- a) price at least covers average fixed cost b) total revenue is increasing c) a change in the rate of technical substitution d) elasticity of demand is infinite e) price at least covers average variable cost

In the short run , a profit -maximizing firm will produce additional units of a product as long as- a) price at least covers average fixed cost b) total revenue is increasing c) a change in the rate of technical substitution d) elasticity of demand is infinite e) price at least covers average variable cost

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 10QP

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Find Marginal cost= Firms profit maximizing level= Profit at this output level= As a result firms will _. This will cause the market supply to __. This will continue until the price is equal to the minimum average cost of $_
The competitive firm maximizes its profit by operating at the point where _____ and price is greater than average variable cost. a. average cost is at a minimum b. total revenue is at a maximum c. profit per unit is at a maximum d. marginal cost equals price
When the market price is equal to the minimum value of the average variable cost curve: a) the firm covers its fixed costs of production b) marginal cost is greater than average variable cost c) average cost is less than average variable cost d) marginal revenue equals average variable cost
Because of increasing marginal cost, most supply curvesA) are horizontal. B) have a negative slope. C) are vertical. D) have a positive slope.
A profit-maximizing firm in the short run will expand output Multiple Choice until marginal cost begins to rise. until total revenue equals total cost. as long as marginal revenue is less than marginal cost. as long as marginal revenue is greater than marginal cost.
A competitive firm maximizes profit when marginal cost: a. equals the price. b. is less than the price. c. is minimized. d. is greater than the price.
Inverse demand function for a firm is P(Q) = 100 -2q and the cost function is represented as C(q) = 10+2q. Find the profit maximizing output for this firm as well as the price. What is the maximum level of profits?
Consider the graph above. If the demand curve intersects the marginal & average cost curve at 100 units, calculate the profit-maximizing quantity. Profit-maximizing quantity = Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Evaluate the following statements. If a statement is true, explain why. If it is false, identify the mistake and correct the error. Assume the market is perfectly competitive. A profit-maximizing firm should select the output level at which the difference between the market price and marginal cost is greatest. An increase in fixed cost lowers the profit-maximizing quantity of output produced in the short run.
A perfectly competitive firm's short−runsupply curve is A. perfectly elastic at the market price. B. upward sloping and is the portion of the marginal cost curve that lies above the average variable cost curve. C. upward sloping and is the portion of the marginal cost curve that lies above the average total cost curve. D. horizontal at the minimum average total cost.
The supply curve of a perfectly competitive firm is: Multiple Choice a. the marginal cost curve only if price exceeds average variable cost. b. the marginal cost curve only if price exceeds average total cost. c. the average total cost curve only if price exceeds average variable cost. d. nonexistent.
price elasticity of supply in the short run and long run Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.