ECON101 Study Guide - Quiz Guide: Average Variable Cost, Marginal Revenue, Marginal Cost
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Identify the choice that best completes the statement or answers the question. A firm sells apples in a perfectly competitive market at a price of . 50 per kilogram. 1. marginal revenue: a. equals . 50. is less than . 50. b. is greater than . 50. c. d. cannot be determined from the information provided. If a price-taking firm selling in a competitive market raises the price of its product above the market- 2. clearing price, it will: a. increase its profits: maintain its profit base since the demand for the product is inelastic, be able to increase its sales, not be able to sell any output. If a perfectly competitive firm is operating in the short run and seeks to maximize profit, the firm. When the market price equals p5, the firm should produce output: 5: q5, operating at a loss, q5, earning an economic profit, q6, operating at a loss. ___: q6, earning a positive economic profit.
