1- Refer to Figure 9-1. If the price a perfectly competitive firm is facing in the market is P2, then theprofit-maximizing firm in the short run should produce outputA) B. B) C. C) D. D) E. E) F 2- Suppose a perfectly competitive firm is producing where its average revenue is less than its lowestaverage variable cost. The firm shouldA) shut down.B) increase the market price.C) reduce its output.D) expand its output.E) not change its output. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.MCP5SRATCPASRAVCP2AвсDEF GH IQuantityFIGURE 9-11) Refer to Figure 9–1. If the price a perfectly competitive firm is facing in the market is P2, then theprofit-maximizing firm in the short run should produce output1)A) В.B) С.C) D.D) E.E) F.2) Suppose a perfectily competitive firm is producing where its average revenue is less than its lowestaverage variable cost. The firm should2)A) shut down.B) increase the market price.C) reduce its output.D) expand its output.E) not change its output.Price $

1) In the perfectly competitive market, the producer operates where P = MC. If price is P2, then the…

Answered: MC Ps SRATC PA SRAVC P3 P2 Pi вс DEF G…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1- Refer to Figure 9-1. If the price a perfectly competitive firm is facing in the market is P2, then the
profit-maximizing firm in the short run should produce output
A) B. B) C. C) D. D) E. E) F

2- Suppose a perfectly competitive firm is producing where its average revenue is less than its lowest
average variable cost. The firm should
A) shut down.
B) increase the market price.
C) reduce its output.
D) expand its output.
E) not change its output.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
MC
P5
SRATC
PA
SRAVC
P2
A
вс
DEF GH I
Quantity
FIGURE 9-1
1) Refer to Figure 9–1. If the price a perfectly competitive firm is facing in the market is P2, then the
profit-maximizing firm in the short run should produce output
1)
A) В.
B) С.
C) D.
D) E.
E) F.
2) Suppose a perfectily competitive firm is producing where its average revenue is less than its lowest
average variable cost. The firm should
2)
A) shut down.
B) increase the market price.
C) reduce its output.
D) expand its output.
E) not change its output.
Price $

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