Exam 6: The Supply Curve and the Behavior of Firms

Consider the information in the table below: Plot the total revenue and total cost curves for this firm. What is the maximum economic profit this firm can earn? How much will the entrepreneur earn when the firm is maximizing profits? Do the slopes of the two curves appear to be the same at the maximum profit level?

The slope of the supply curve reflects a(n)

A competitive firm's marginal revenue curve is the same as its demand curve.

For a competitive firm, profit maximization occurs when

Exhibit 6-6 -Refer to Exhibit 6-6. Let market price be $15 and fixed costs be $5. Calculate the profit at the profit-maximizing output level.

Exhibit 6-7 -Refer to Exhibit 6-7. If market price is $18, producer surplus for the profit-maximizing firm is

The change in variable costs that results from producing one more unit of output is called

Exhibit 6-7 -Refer to Exhibit 6-7. Which of the following statements is false?

The reason for an upward-sloping supply curve is increasing marginal cost.

Exhibit 6-5 -Refer to Exhibit 6-5. Profits become negative when the firm produces

The reason for increasing marginal cost is the diminishing marginal product of labor.

The table below shows the cost schedule for Walworth Baker.

If a competitive firm continues to produce when marginal revenue is less than marginal cost, then each additional unit of output

Producer surplus is the difference between the marginal cost of an item and the price received for it.

To derive a firm's supply curve, we assume that a firm chooses to produce where

The total cost curve

Producer surplus is the

In economics, the main objective of a firm is to maximize customer satisfaction.

The supply curve obtained from the relationship between profits and production is different from the supply curve obtained from the relationship between price and marginal cost.

To maximize profits, a competitive firm increases its output as long as