EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 5MCQ
To determine
The correct option in case of the short run profit maximizing firm is to be determined.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Calculate the total revenue if the firm produces 10 versus 9 units. Then, calculate the marginal revenue of the 10th unit produced.
The marginal revenue of the 10th unit produced is________.
Calculate the total revenue if the firm produces 20 versus 19 units. Then, calculate the marginal revenue of the 20th unit produced.
The marginal revenue of the 20th unit produced is_________.
Calculate the total revenue if the firm produces 4 versus 3 units. Then, calculate the marginal revenue of the fourth unit produced.
The marginal revenue of the fourth unit produced is________.
Calculate the total revenue if the firm produces 8 versus 7 units. Then, calculate the marginal revenue of the eighth unit produced.
The marginal revenue of the eighth unit produced is________.
I.
A company produces at an output level where marginal cost is equal to marginal revenue
and has the following revenue and cost levels:
Total revenue = $1,450
Total cost = $1,500
Total variable cost = $1,300
What would you suggest?
a. Shut down.
b. Continue to produce because the loss is less than the total fixed cost.
c. Increase production to lower the marginal cost.
e. Raise the price.
II.
At current long-run production levels, the marginal revenue of a competitive firm is $15 and
the marginal cost of the firm is $15. If the market is perfectly competitive, the firm should
a. cut back on production.
b. stop production all together.
c. produce more.
d. continue producing at current levels.
Chapter 15 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 15 - Prob. 1SPPACh. 15 - Prob. 2SPPACh. 15 - Prob. 3SPPACh. 15 - Prob. 4SPPACh. 15 - Prob. 5SPPACh. 15 - Prob. 6SPPACh. 15 - Prob. 7SPPACh. 15 - Prob. 8SPPACh. 15 - Prob. 9SPPACh. 15 - Prob. 10SPPA
Ch. 15 - Prob. 11SPPACh. 15 - Prob. 1IAPACh. 15 - Prob. 2IAPACh. 15 - Prob. 3IAPACh. 15 - Prob. 4IAPACh. 15 - Prob. 5IAPACh. 15 - Prob. 6IAPACh. 15 - Prob. 7IAPACh. 15 - Prob. 8IAPACh. 15 - Prob. 9IAPACh. 15 - Prob. 10IAPACh. 15 - Prob. 11IAPACh. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 6MCQCh. 15 - Prob. 7MCQCh. 15 - Prob. 8MCQ
Knowledge Booster
Similar questions
- Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry: P5 P4 P3 P2 P1 H Q1 Q2 Q3 Refer to the graph above to answe question. Which of the following statements is correct? ATC Sarrow_forwardThere are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through economies of scale government protection control of an important input . b. ABC’s market power does does not guarantee that the firm makes an economic profit.arrow_forwarda. Why, in perfect competition, is the marginal revenue curve perfectly elastic? b. Why is the marginal cost curve shaped the way it is?arrow_forward
- i. Calculate the marginal cost, marginal revenue and profit for each unit of production. ii. How many units should the firm produce to maximise profit?arrow_forwardThe apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 per cent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit. In the long run, the ________. Select one: A. increases; zero; price of apples will return to its original level B. increases; zero; orchards will be replanted and economic profit will return to zero C. increases; positive; orchards will be replanted and economic profit will return to zero D. remains the same; zero; orchards will be replanted and growers will make normal profitsarrow_forwardd. What is the deadweight loss in this market, if any? e. How does a firm decide to increase or decrease output? i. What do they do when marginal revenue is less than marginal cost? ii. What do they do when marginal revenue is more than marginal cost? f. When does a firm decided to shut down verses temporarily stopping production? g. In this market the demand curve is what? i. Short run ii. Long run h. In this market the supply curve is what? i. Short run ii. Long runarrow_forward
- The profit when the firm is profit maximizing is _______arrow_forward1. Fill in this chart and explain why the firm earnsa profit no matter how many units they produce or the price they choose. 2. Using this data, how many units should this firm produce and what price should they chargeassuming they want to profit maximize.arrow_forwardQUESTION 8 When the marginal-cost curve lies below the marginal-revenue curve a. the firm cannot improve its profit since revenue is already greater than cost. b. marginal revenue is greater than marginal cost, and the firm should therefore increase production to increase profits. c. marginal revenue is greater than marginal cost, and the firm should therefore decrease production to increase profits. d. marginal revenue is less than marginal cost, and the firm should therefore decrease production to increase profits. e. it is not possible for this firm to increase profits since it is failing to operate at an efficient point.arrow_forward
- 18. What is the value of the total revenue? 19. What is the value of the marginal revenue? 20. What is the value of the average cost?arrow_forwardThe table provides data on a market demand schedule (top two rows) and a firm's average and marginal cost schedules (bottom four rows). 1. What is the firm's shutdown point? A firm will stop producing an output in the short run when the market price of the good is _________. A. below minimum AVC B. equals ATC C. below minimum ATC D. equals MC This firm's shutdown point is at a market price of $ ? per unit and its profit-maximizing output is ? units.arrow_forwardQ. Suppose the book-printing industry is competitive and begins in long-run equilibrium. a. Draw a diagram describing the typical firm in the industry. b. Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing books. What happens to Hi-Tech’s profits and the price of books in the short run when Hi-Tech’s patent prevents other firms from using new technology? c. What happens in the long run when the patent expires and other firms are free to use the technology?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education