1. A price-taking firmâs short-run supply curve is
a. the portion of its marginal cost curve above the average variable cost curve.
b. its average total cost curve.
c. its average variable cost curve.
d. its entire marginal cost curve. e. none of the above.
2. Which of the following is incorrect?
a. For a firm facing a downward-sloping demand curve, marginal revenue will be less than price.
b. In making output decisions, a firm should produce the output level for which marginal revenue equals marginal cost.
c. A price-taking firm will maximize profits by choosing that level of output for which price equals marginal cost.
d. The demand curve facing a price-taking firm is downward-sloping to the right.
1. A price-taking firmâs short-run supply curve is
a. the portion of its marginal cost curve above the average variable cost curve.
b. its average total cost curve.
c. its average variable cost curve.
d. its entire marginal cost curve. e. none of the above.
2. Which of the following is incorrect?
a. For a firm facing a downward-sloping demand curve, marginal revenue will be less than price.
b. In making output decisions, a firm should produce the output level for which marginal revenue equals marginal cost.
c. A price-taking firm will maximize profits by choosing that level of output for which price equals marginal cost.
d. The demand curve facing a price-taking firm is downward-sloping to the right.
Related textbook solutions
Related questions
QUESTION 22
For a perfectly competitive firm, profit maximization (or loss minimization) occurs at the level of output at which
| a. |
MR = MC. |
|
| b. |
MR = AVC. |
|
| c. |
P = ATC. |
|
| d. |
MR = ATC. |
4 points
QUESTION 23
If MR > MC, then
| a. |
profits are being maximized. |
|
| b. |
the firm is producing too much of the good to be maximizing profits. |
|
| c. |
the firm can increase its profits (or minimize its losses) by increasing output. |
|
| d. |
the firm must be incurring losses. |
4 points
QUESTION 24
If firms are earning zero economic profits, they must be producing at an output level at which
| a. |
price minus marginal cost. |
|
| b. |
total revenue equals total costs, in other words, normal profits. |
|
| c. |
price equals average variable cost. |
|
| d. |
marginal revenue equals marginal cost. |
|
| e. |
none of the above |
4 points
QUESTION 25
In the theory of perfect competition,
| a. |
the market demand curve is horizontal. |
|
| b. |
the single firm faces a horizontal demand curve. |
|
| c. |
the single firm faces a downward-sloping demand curve. |
|
| d. |
the market demand curve is downward sloping. |
|
| e. |
b and d |
