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Deck 8: Perfect Competition
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The Competitive Industry and FirmRefer to the graph above to answer this question.What is the value of total revenue at the break-even price?
A)$40.
B)$100.
C)$200.
D)$210.
E)$280.
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The Competitive Industry and FirmRefer to the graph above to answer this question.What are the values of the shut-down price and the break-even price?
A)$10 and $20.
B)$10 and $40.
C)$10 and $50.
D)$20 and $40.
E)Cannot be determined from this information.
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The Competitive Industry and FirmRefer to the graph above to answer this question.What is the total loss at the shut-down price?
A)$30.
B)$100.
C)$150.
D)$210.
E)$250.
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Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
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Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new break-even price?
A)$30.
B)$40.
C)$50.
D)$60.
E)$70.
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new break-even price?
A)$30.
B)$40.
C)$50.
D)$60.
E)$70.
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The following graph shows the total variable costs and the total costs for a competitive producer:
Refer to the above graph to answer this question.If the price of the product is $30,what are the break-even output(s)?
A)0.
B)1 & 5.
C)1 &10.
D)3 & 5.
E)3 & 10.
Refer to the above graph to answer this question.If the price of the product is $30,what are the break-even output(s)?
A)0.
B)1 & 5.
C)1 &10.
D)3 & 5.
E)3 & 10.
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Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the price is $75 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and $40.
B)5 and $75.
C)5 and $80.
D)6 and $80.
E)8 and $50.
Refer to the above information to answer this question.If the price is $75 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and $40.
B)5 and $75.
C)5 and $80.
D)6 and $80.
E)8 and $50.
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The following graph shows the total variable costs and the total costs for a competitive producer:
Refer to the above graph to answer this question.What is the value of the break-even price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
Refer to the above graph to answer this question.What is the value of the break-even price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
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Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.What is the value of the break-even price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
Refer to the above information to answer this question.What is the value of the break-even price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
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Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the price is $55 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and a profit of $20.
B)4 and a loss of $20.
C)5 and a profit of $25.
D)5 and a loss of $25.
E)The firm would shut down.
Refer to the above information to answer this question.If the price is $55 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and a profit of $20.
B)4 and a loss of $20.
C)5 and a profit of $25.
D)5 and a loss of $25.
E)The firm would shut down.
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Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new shut-down price?
A)$30.
B)$50.
C)$60.
D)$70.
E)$80.
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new shut-down price?
A)$30.
B)$50.
C)$60.
D)$70.
E)$80.
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The following graph shows the total variable costs and the total costs for a competitive producer:
Refer to the above graph to answer this question.What is the value of the shut-down- price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
Refer to the above graph to answer this question.What is the value of the shut-down- price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?
A)0.
B)20.
C)90.
D)100.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?
A)0.
B)20.
C)90.
D)100.
E)Cannot be determined.
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The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $70,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $30.
C)3 and a loss of $530.
D)5 and a profit of $200.
E)8 and a profit of $140.
Refer to the above information to answer this question.If the price of the product is $70,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $30.
C)3 and a loss of $530.
D)5 and a profit of $200.
E)8 and a profit of $140.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $40,what will be the average profit?
A)0.
B)$10.
C)$18.
D)$1,000.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $40,what will be the average profit?
A)0.
B)$10.
C)$18.
D)$1,000.
E)Cannot be determined.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $10,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)20.
C)30.
D)60.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $10,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)20.
C)30.
D)60.
E)Cannot be determined.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the break-even price?
A)$10.
B)$15.
C)$20.
D)$1,200.
E)Cannot be determined.
Refer to the above graph to answer this question.What is the value of the break-even price?
A)$10.
B)$15.
C)$20.
D)$1,200.
E)Cannot be determined.
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The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $250,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a profit of $50.
C)5 and a profit of $260.
D)6 and a profit of $300.
E)8 and a profit of $580.
Refer to the above information to answer this question.If the price of the product is $250,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a profit of $50.
C)5 and a profit of $260.
D)6 and a profit of $300.
E)8 and a profit of $580.
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Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 and the price is $75 per unit,what are the profit maximizing output and the level of profits?
A)5 and $25.
B)5 and $30.
C)6 and $30.
D)8 and $20.
E)The firm will shut down.
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 and the price is $75 per unit,what are the profit maximizing output and the level of profits?
A)5 and $25.
B)5 and $30.
C)6 and $30.
D)8 and $20.
E)The firm will shut down.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the break-even price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
Refer to the above graph to answer this question.What is the value of the break-even price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
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The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $350,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)6 and a profit of $900.
C)7 and a profit of $950.
D)7 and a profit of $1,450.
E)8 and a profit of $880.
Refer to the above information to answer this question.If the price of the product is $350,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)6 and a profit of $900.
C)7 and a profit of $950.
D)7 and a profit of $1,450.
E)8 and a profit of $880.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.Which of the following represents the firm's supply curve?
A)Refer to table A
B)Refer to table B
C)Refer to table C
D)Refer to table D
Refer to the above graph to answer this question.Which of the following represents the firm's supply curve?
A)Refer to table A
B)Refer to table B
C)Refer to table C
D)Refer to table D
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is P5,what is the profit-maximizing output?
A)Q1.
B)Q2.
C)Q3.
D)Q4.
E)Q5.
Refer to the above graph to answer this question.If the price of the product is P5,what is the profit-maximizing output?
A)Q1.
B)Q2.
C)Q3.
D)Q4.
E)Q5.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is below P1,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)Q1.
C)Q2.
D)Q3.
E)Q4.
Refer to the above graph to answer this question.If the price of the product is below P1,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)Q1.
C)Q2.
D)Q3.
E)Q4.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $35,what will be the total profit?
A)0.
B)$90.
C)$900.
D)$3,150.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $35,what will be the total profit?
A)0.
B)$90.
C)$900.
D)$3,150.
E)Cannot be determined.
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The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $160,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a loss of $190.
C)5 and a profit of $310.
D)6 and a loss of $240.
E)8 and a profit of $140.
Refer to the above information to answer this question.If the price of the product is $160,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a loss of $190.
C)5 and a profit of $310.
D)6 and a loss of $240.
E)8 and a profit of $140.
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The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)$10.
B)$15.
C)$20.
D)$750.
E)Cannot be determined.
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)$10.
B)$15.
C)$20.
D)$750.
E)Cannot be determined.
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The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.What is the shut-down price?
A)$150.
B)$170.
C)$200.
D)$270.
E)$500.
Refer to the above information to answer this question.What is the shut-down price?
A)$150.
B)$170.
C)$200.
D)$270.
E)$500.
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The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.What is the break-even price?
A)$150.
B)$170.
C)$270.
D)$280.
E)$500.
Refer to the above information to answer this question.What is the break-even price?
A)$150.
B)$170.
C)$270.
D)$280.
E)$500.
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The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $500,what is the optimal output and what is the profit or loss?
A)5 and a profit of $1,150.
B)6 and a profit of $1,200.
C)7 and a profit of $560.
D)7 and a profit of $1,430.
E)8 and a profit of $1,330.
Refer to the above information to answer this question.If the price is $500,what is the optimal output and what is the profit or loss?
A)5 and a profit of $1,150.
B)6 and a profit of $1,200.
C)7 and a profit of $560.
D)7 and a profit of $1,430.
E)8 and a profit of $1,330.
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The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $120,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $90.
C)3 and a loss of $150.
D)4 and a loss of $640.
E)5 and a profit of $250.
Refer to the above information to answer this question.If the price is $120,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $90.
C)3 and a loss of $150.
D)4 and a loss of $640.
E)5 and a profit of $250.
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The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $250,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)4 and a loss of $120.
C)5 and a loss of $100.
D)5 and a loss of $400.
E)6 and a loss of $150.
Refer to the above information to answer this question.If the price is $250,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)4 and a loss of $120.
C)5 and a loss of $100.
D)5 and a loss of $400.
E)6 and a loss of $150.
Question
The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $350,what is the optimal output and what is the profit or loss?
A)5 and a profit of $400.
B)5 and a profit of $1,100.
C)6 and a loss of $200.
D)6 and a profit of $450.
E)7 and a profit of $560.
Refer to the above information to answer this question.If the price is $350,what is the optimal output and what is the profit or loss?
A)5 and a profit of $400.
B)5 and a profit of $1,100.
C)6 and a loss of $200.
D)6 and a profit of $450.
E)7 and a profit of $560.
Question
The following table shows the costs for a manufacturer:
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$10.
B)$18.
C)$20.
D)$40.
E)$45.
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$10.
B)$18.
C)$20.
D)$40.
E)$45.
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The following table shows the costs for a manufacturer:
Refer to the above information to answer this question.What is the value of the break-even price?
A)$18.
B)$30.
C)$40.
D)$42.
E)$45.
Refer to the above information to answer this question.What is the value of the break-even price?
A)$18.
B)$30.
C)$40.
D)$42.
E)$45.
Question
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Deck 8: Perfect Competition
1
All of the following except one are characteristics of perfect competition.Which is the exception?
A)Extensive information regarding the market is available to all.
B)There is extensive advertising.
C)There is easy entry and exit into the market.
D)There are a large number of buyers and sellers.
E)No preferences are shown to any buyer or seller.
A)Extensive information regarding the market is available to all.
B)There is extensive advertising.
C)There is easy entry and exit into the market.
D)There are a large number of buyers and sellers.
E)No preferences are shown to any buyer or seller.
There is extensive advertising.
2
The following are different market structures:
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which all buyers and sellers have no control over the price?
A)1.
B)2.
C)3.
D)4.
E)5.
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which all buyers and sellers have no control over the price?
A)1.
B)2.
C)3.
D)4.
E)5.
2.
3
The Competitive Industry and FirmRefer to the graph above to answer this question.What is the value of total revenue at the break-even price?
A)$40.
B)$100.
C)$200.
D)$210.
E)$280.
$280.
4
What is the term for the amount of revenue that will always equal the price of the product in a perfectly-competitive market?
A)Marginal price.
B)Net revenue.
C)Average revenue.
D)Total revenue.
A)Marginal price.
B)Net revenue.
C)Average revenue.
D)Total revenue.
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5
Which of the following refers to the perfectly competitive firm?
A)It is a price-maker.
B)It is a price-taker.
C)It might be either a price-maker or a price-taker.
D)It is neither a price-maker nor a price-taker.
A)It is a price-maker.
B)It is a price-taker.
C)It might be either a price-maker or a price-taker.
D)It is neither a price-maker nor a price-taker.
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6
What is marginal revenue?
A)The total revenue divided by the price.
B)The price multiplied by the quantity of product sold.
C)The amount of revenue per unit sold.
D)The extra revenue derived from the sale of one more unit.
A)The total revenue divided by the price.
B)The price multiplied by the quantity of product sold.
C)The amount of revenue per unit sold.
D)The extra revenue derived from the sale of one more unit.
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7
The Competitive Industry and FirmRefer to the graph above to answer this question.What are the values of the shut-down price and the break-even price?
A)$10 and $20.
B)$10 and $40.
C)$10 and $50.
D)$20 and $40.
E)Cannot be determined from this information.
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8
All of the following,except one,are reasons why the stock market is not a good example of a perfectly competitive market.Which is the exception?
A)The action of a single buyer or seller is able to affect the price of stocks.
B)You need to be rich in order to buy stocks.
C)There is not easy entry since a commission must be paid to a broker in order to trade.
D)Not all traders have equal access to information.
A)The action of a single buyer or seller is able to affect the price of stocks.
B)You need to be rich in order to buy stocks.
C)There is not easy entry since a commission must be paid to a broker in order to trade.
D)Not all traders have equal access to information.
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9
Which of the following statements is correct regarding a perfectly competitive firm's total revenue?
A)The higher the price,the lower will be the total revenue.
B)The higher the price,the higher will be the total revenue.
C)When graphed,the total revenue curve is a horizontal line.
D)There is an inverse relationship between the price and the total revenue.
A)The higher the price,the lower will be the total revenue.
B)The higher the price,the higher will be the total revenue.
C)When graphed,the total revenue curve is a horizontal line.
D)There is an inverse relationship between the price and the total revenue.
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10
Which of the following statements is true regarding the price in a perfectly competitive market?
A)Price equals average revenue but not marginal revenue.
B)Price equals marginal revenue but not average revenue.
C)Price is equal to neither the average nor the marginal revenue.
D)Price is equal to both the average and marginal revenue.
A)Price equals average revenue but not marginal revenue.
B)Price equals marginal revenue but not average revenue.
C)Price is equal to neither the average nor the marginal revenue.
D)Price is equal to both the average and marginal revenue.
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11
The Competitive Industry and FirmRefer to the graph above to answer this question.What is the total loss at the shut-down price?
A)$30.
B)$100.
C)$150.
D)$210.
E)$250.
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12
What is the term for the amount of revenue received per unit sold?
A)Average revenue.
B)Total revenue.
C)Marginal revenue.
D)Net revenue.
A)Average revenue.
B)Total revenue.
C)Marginal revenue.
D)Net revenue.
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13
The following are different market structures:
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are a few large sellers and the product is identical?
A)1.
B)2.
C)3.
D)4.
E)5.
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are a few large sellers and the product is identical?
A)1.
B)2.
C)3.
D)4.
E)5.
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14
What is perfect competition?
A)A market in which firms try to undercut each others' prices on a consistent basis.
B)A market where producers try to emphasize the differences in their products.
C)A market in which all buyers and sellers are price-takers.
D)A market in which the sellers are all price-makers.
A)A market in which firms try to undercut each others' prices on a consistent basis.
B)A market where producers try to emphasize the differences in their products.
C)A market in which all buyers and sellers are price-takers.
D)A market in which the sellers are all price-makers.
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15
What is average revenue?
A)The price multiplied by the quantity sold.
B)The total revenue divided by the price.
C)The extra revenue derived from the sale of one more unit.
D)It is equal to the price in perfectly competitive markets.
A)The price multiplied by the quantity sold.
B)The total revenue divided by the price.
C)The extra revenue derived from the sale of one more unit.
D)It is equal to the price in perfectly competitive markets.
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16
What is the formula for marginal revenue?
A) TR/Q
B)Q/ TR
C) TR/ Q
D)TR/Q
A) TR/Q
B)Q/ TR
C) TR/ Q
D)TR/Q
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17
What is the term for the extra revenue derived from the sale of one more unit?
A)Average revenue.
B)Marginal revenue.
C)Net revenue.
D)Total revenue.
A)Average revenue.
B)Marginal revenue.
C)Net revenue.
D)Total revenue.
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18
The following are different market structures:
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are numerous sellers who sell an identical product?
A)1.
B)2.
C)3.
D)4.
E)5.
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are numerous sellers who sell an identical product?
A)1.
B)2.
C)3.
D)4.
E)5.
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19
The following are different market structures:
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are a few large sellers and the product is differentiated?
A)1.
B)2.
C)3.
D)4.
E)5.
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are a few large sellers and the product is differentiated?
A)1.
B)2.
C)3.
D)4.
E)5.
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20
The following are different market structures:
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are many sellers and the product is differentiated?
A)1.
B)2.
C)3.
D)4.
E)5.
1. Monopoly
2. Perfect Competitions
3. Monopolistic Competition
4. Undifferentiated Oligopoly
5. Differentiated Oligopoly
Refer to the above information to answer this question.What is the name of the market in which there are many sellers and the product is differentiated?
A)1.
B)2.
C)3.
D)4.
E)5.
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21
Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
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22
What is break-even output?
A)The output at which the total revenue just covers a firm's total fixed cost.
B)The output at which the total revenue just covers a firm's total variable cost.
C)The output at which the total revenue just covers a firm's fixed and variable costs including normal profits.
D)The output at which the firm is making zero normal profits.
A)The output at which the total revenue just covers a firm's total fixed cost.
B)The output at which the total revenue just covers a firm's total variable cost.
C)The output at which the total revenue just covers a firm's fixed and variable costs including normal profits.
D)The output at which the firm is making zero normal profits.
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23
What is the formula for marginal profit (M)?
A) T / Q.
B) TC/ Q.
C) Q/ T .
D) Q x T .
A) T / Q.
B) TC/ Q.
C) Q/ T .
D) Q x T .
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24
Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new break-even price?
A)$30.
B)$40.
C)$50.
D)$60.
E)$70.
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new break-even price?
A)$30.
B)$40.
C)$50.
D)$60.
E)$70.
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25
What is the term for the level of price at which the firm is just covering all of its variable costs?
A)Shutdown price.
B)Economic price.
C)Break-even price.
D)Average price.
A)Shutdown price.
B)Economic price.
C)Break-even price.
D)Average price.
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26
What is the term for the profit per unit produced;that is,the total profit divided by output?
A)Marginal profit.
B)Economic profit.
C)Normal profit.
D)Average profit.
A)Marginal profit.
B)Economic profit.
C)Normal profit.
D)Average profit.
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27
The following graph shows the total variable costs and the total costs for a competitive producer:
Refer to the above graph to answer this question.If the price of the product is $30,what are the break-even output(s)?
A)0.
B)1 & 5.
C)1 &10.
D)3 & 5.
E)3 & 10.
Refer to the above graph to answer this question.If the price of the product is $30,what are the break-even output(s)?
A)0.
B)1 & 5.
C)1 &10.
D)3 & 5.
E)3 & 10.
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28
When is a competitive firm's profits maximized?
A)When P = AC.
B)When MR = MC.
C)When P = MR.
D)When MR = AC.
A)When P = AC.
B)When MR = MC.
C)When P = MR.
D)When MR = AC.
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29
What is the term for the level of output at which the sales revenue of the firm just covers the fixed and variable costs including normal profits?
A)Capacity output.
B)Explicit output.
C)Break-even output.
D)Average output.
A)Capacity output.
B)Explicit output.
C)Break-even output.
D)Average output.
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30
What is the term for the price at which the firm makes zero economic profits?
A)Shutdown price.
B)Average price.
C)Fixed price.
D)Break-even price.
A)Shutdown price.
B)Average price.
C)Fixed price.
D)Break-even price.
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31
Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the price is $75 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and $40.
B)5 and $75.
C)5 and $80.
D)6 and $80.
E)8 and $50.
Refer to the above information to answer this question.If the price is $75 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and $40.
B)5 and $75.
C)5 and $80.
D)6 and $80.
E)8 and $50.
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32
The following graph shows the total variable costs and the total costs for a competitive producer:
Refer to the above graph to answer this question.What is the value of the break-even price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
Refer to the above graph to answer this question.What is the value of the break-even price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
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33
What is break-even price?
A)A price that just covers average fixed costs.
B)A price that just covers average total costs.
C)A price at which the firm makes only normal profits.
D)A price that just covers average variable costs.
A)A price that just covers average fixed costs.
B)A price that just covers average total costs.
C)A price at which the firm makes only normal profits.
D)A price that just covers average variable costs.
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34
What is shutdown price?
A)The price at which the firm makes only normal profits.
B)The price which just covers a firm's average fixed cost.
C)The price at which the firm makes zero economic profits.
D)The price which just covers a firm's average variable costs.
A)The price at which the firm makes only normal profits.
B)The price which just covers a firm's average fixed cost.
C)The price at which the firm makes zero economic profits.
D)The price which just covers a firm's average variable costs.
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35
Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.What is the value of the break-even price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
Refer to the above information to answer this question.What is the value of the break-even price?
A)$20.
B)$30.
C)$40.
D)$50.
E)$60.
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36
What is the term for the price at which the firm makes only normal profits?
A)Shutdown price.
B)Break-even price.
C)Average price.
D)Economic price.
A)Shutdown price.
B)Break-even price.
C)Average price.
D)Economic price.
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37
Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the price is $55 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and a profit of $20.
B)4 and a loss of $20.
C)5 and a profit of $25.
D)5 and a loss of $25.
E)The firm would shut down.
Refer to the above information to answer this question.If the price is $55 per unit,what are the profit maximizing output and the level of profit or loss?
A)4 and a profit of $20.
B)4 and a loss of $20.
C)5 and a profit of $25.
D)5 and a loss of $25.
E)The firm would shut down.
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38
Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new shut-down price?
A)$30.
B)$50.
C)$60.
D)$70.
E)$80.
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 what would be the new shut-down price?
A)$30.
B)$50.
C)$60.
D)$70.
E)$80.
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39
If the price of a product increases,which of the following statements regarding the perfectly competitive firm is correct?
A)Its average revenue curve will be steeper.
B)Its average revenue curve will be flatter.
C)Its marginal revenue curve will be flatter.
D)Its total revenue curve will be steeper.
A)Its average revenue curve will be steeper.
B)Its average revenue curve will be flatter.
C)Its marginal revenue curve will be flatter.
D)Its total revenue curve will be steeper.
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40
The following graph shows the total variable costs and the total costs for a competitive producer:
Refer to the above graph to answer this question.What is the value of the shut-down- price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
Refer to the above graph to answer this question.What is the value of the shut-down- price?
A)0.
B)$12.
C)$24.
D)$60.
E)$120.
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41
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?
A)0.
B)20.
C)90.
D)100.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $35,what is the profit-maximizing output?
A)0.
B)20.
C)90.
D)100.
E)Cannot be determined.
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42
The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $70,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $30.
C)3 and a loss of $530.
D)5 and a profit of $200.
E)8 and a profit of $140.
Refer to the above information to answer this question.If the price of the product is $70,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $30.
C)3 and a loss of $530.
D)5 and a profit of $200.
E)8 and a profit of $140.
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43
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $40,what will be the average profit?
A)0.
B)$10.
C)$18.
D)$1,000.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $40,what will be the average profit?
A)0.
B)$10.
C)$18.
D)$1,000.
E)Cannot be determined.
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44
Delta Rail is considering adding an additional run on its Hope to Princeton commuter route.The total cost of the additional trip is estimated to be $3,000 of which $1,000 are variable costs.The anticipated extra revenues are $1,800.What should the company do?
A)Not add the train since the company will make a loss.
B)Not add the train since the company cannot cover its total fixed costs.
C)Add the train since the loss is less than its total variable costs.
D)Add the train since the marginal revenue of the extra run exceeds its marginal cost.
A)Not add the train since the company will make a loss.
B)Not add the train since the company cannot cover its total fixed costs.
C)Add the train since the loss is less than its total variable costs.
D)Add the train since the marginal revenue of the extra run exceeds its marginal cost.
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45
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $10,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)20.
C)30.
D)60.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $10,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)20.
C)30.
D)60.
E)Cannot be determined.
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46
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the break-even price?
A)$10.
B)$15.
C)$20.
D)$1,200.
E)Cannot be determined.
Refer to the above graph to answer this question.What is the value of the break-even price?
A)$10.
B)$15.
C)$20.
D)$1,200.
E)Cannot be determined.
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47
The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $250,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a profit of $50.
C)5 and a profit of $260.
D)6 and a profit of $300.
E)8 and a profit of $580.
Refer to the above information to answer this question.If the price of the product is $250,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a profit of $50.
C)5 and a profit of $260.
D)6 and a profit of $300.
E)8 and a profit of $580.
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48
Assume that the following data is for a profit-maximizing manufacturer:
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 and the price is $75 per unit,what are the profit maximizing output and the level of profits?
A)5 and $25.
B)5 and $30.
C)6 and $30.
D)8 and $20.
E)The firm will shut down.
Refer to the above information to answer this question.If the total fixed costs were to increase by $50 and the price is $75 per unit,what are the profit maximizing output and the level of profits?
A)5 and $25.
B)5 and $30.
C)6 and $30.
D)8 and $20.
E)The firm will shut down.
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49
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the break-even price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
Refer to the above graph to answer this question.What is the value of the break-even price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
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50
The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $350,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)6 and a profit of $900.
C)7 and a profit of $950.
D)7 and a profit of $1,450.
E)8 and a profit of $880.
Refer to the above information to answer this question.If the price of the product is $350,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)6 and a profit of $900.
C)7 and a profit of $950.
D)7 and a profit of $1,450.
E)8 and a profit of $880.
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51
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.Which of the following represents the firm's supply curve?
A)Refer to table A
B)Refer to table B
C)Refer to table C
D)Refer to table D
Refer to the above graph to answer this question.Which of the following represents the firm's supply curve?
A)Refer to table A
B)Refer to table B
C)Refer to table C
D)Refer to table D
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52
The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run:
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the firm's total variable costs exceed its total revenue,what should the firm do?
A)1.
B)2.
C)3.
D)4.
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the firm's total variable costs exceed its total revenue,what should the firm do?
A)1.
B)2.
C)3.
D)4.
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53
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)P1.
B)P2.
C)P3.
D)P4.
E)P5.
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54
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is P5,what is the profit-maximizing output?
A)Q1.
B)Q2.
C)Q3.
D)Q4.
E)Q5.
Refer to the above graph to answer this question.If the price of the product is P5,what is the profit-maximizing output?
A)Q1.
B)Q2.
C)Q3.
D)Q4.
E)Q5.
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55
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is below P1,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)Q1.
C)Q2.
D)Q3.
E)Q4.
Refer to the above graph to answer this question.If the price of the product is below P1,what is the profit-maximizing (or loss-minimizing)output?
A)0.
B)Q1.
C)Q2.
D)Q3.
E)Q4.
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56
The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run:
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the firm's total costs exceed its total revenue,what should the firm do?
A)1.
B)2.
C)3.
D)4.
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the firm's total costs exceed its total revenue,what should the firm do?
A)1.
B)2.
C)3.
D)4.
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57
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.If the price of the product is $35,what will be the total profit?
A)0.
B)$90.
C)$900.
D)$3,150.
E)Cannot be determined.
Refer to the above graph to answer this question.If the price of the product is $35,what will be the total profit?
A)0.
B)$90.
C)$900.
D)$3,150.
E)Cannot be determined.
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58
The total fixed costs of a perfectly-competitive manufacturer are $500,and its marginal costs are as follows:
Refer to the above information to answer this question.If the price of the product is $160,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a loss of $190.
C)5 and a profit of $310.
D)6 and a loss of $240.
E)8 and a profit of $140.
Refer to the above information to answer this question.If the price of the product is $160,how many will the manufacturer produce and what will be its profit or loss?
A)0 and a loss of $500.
B)5 and a loss of $190.
C)5 and a profit of $310.
D)6 and a loss of $240.
E)8 and a profit of $140.
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59
The following graph shows the costs for a perfectly competitive producer:
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)$10.
B)$15.
C)$20.
D)$750.
E)Cannot be determined.
Refer to the above graph to answer this question.What is the value of the shut-down price?
A)$10.
B)$15.
C)$20.
D)$750.
E)Cannot be determined.
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60
All of the following statements except one are true regarding the effect of a price increase on a perfectly competitive firm.Which is the exception?
A)Production will increase.
B)The range of profitable outputs will increase.
C)Total costs will decrease.
D)The profitability of the firm will increase.
A)Production will increase.
B)The range of profitable outputs will increase.
C)Total costs will decrease.
D)The profitability of the firm will increase.
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61
The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.What is the shut-down price?
A)$150.
B)$170.
C)$200.
D)$270.
E)$500.
Refer to the above information to answer this question.What is the shut-down price?
A)$150.
B)$170.
C)$200.
D)$270.
E)$500.
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62
Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $70,what will be her profit or loss at the optimal output?
A)She will break even.
B)A loss of $50.
C)A profit of $50.
D)A loss of $60.
E)A loss of $90.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $70,what will be her profit or loss at the optimal output?
A)She will break even.
B)A loss of $50.
C)A profit of $50.
D)A loss of $60.
E)A loss of $90.
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63
The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.What is the break-even price?
A)$150.
B)$170.
C)$270.
D)$280.
E)$500.
Refer to the above information to answer this question.What is the break-even price?
A)$150.
B)$170.
C)$270.
D)$280.
E)$500.
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64
Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar.
Refer to the information above to answer this question.What is the manufacturer's break-even price?
A)0.
B)$64.
C)$80.
D)$82.
E)$90.
Refer to the information above to answer this question.What is the manufacturer's break-even price?
A)0.
B)$64.
C)$80.
D)$82.
E)$90.
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65
The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run:
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the price exceeds the firm's average variable costs but is less than its marginal cost what should the firm do?
A)1.
B)2.
C)3.
D)4.
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the price exceeds the firm's average variable costs but is less than its marginal cost what should the firm do?
A)1.
B)2.
C)3.
D)4.
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66
The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $500,what is the optimal output and what is the profit or loss?
A)5 and a profit of $1,150.
B)6 and a profit of $1,200.
C)7 and a profit of $560.
D)7 and a profit of $1,430.
E)8 and a profit of $1,330.
Refer to the above information to answer this question.If the price is $500,what is the optimal output and what is the profit or loss?
A)5 and a profit of $1,150.
B)6 and a profit of $1,200.
C)7 and a profit of $560.
D)7 and a profit of $1,430.
E)8 and a profit of $1,330.
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67
Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar.
Refer to the information above to answer this question.What is the manufacturer's shut-down price?
A)0.
B)$64.
C)$65.
D)$80.
E)$90.
Refer to the information above to answer this question.What is the manufacturer's shut-down price?
A)0.
B)$64.
C)$65.
D)$80.
E)$90.
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68
The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $120,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $90.
C)3 and a loss of $150.
D)4 and a loss of $640.
E)5 and a profit of $250.
Refer to the above information to answer this question.If the price is $120,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)3 and a loss of $90.
C)3 and a loss of $150.
D)4 and a loss of $640.
E)5 and a profit of $250.
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69
The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $250,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)4 and a loss of $120.
C)5 and a loss of $100.
D)5 and a loss of $400.
E)6 and a loss of $150.
Refer to the above information to answer this question.If the price is $250,what is the optimal output and what is the profit or loss?
A)0 and a loss of $500.
B)4 and a loss of $120.
C)5 and a loss of $100.
D)5 and a loss of $400.
E)6 and a loss of $150.
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70
The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
Refer to the above information to answer this question.If the price is $350,what is the optimal output and what is the profit or loss?
A)5 and a profit of $400.
B)5 and a profit of $1,100.
C)6 and a loss of $200.
D)6 and a profit of $450.
E)7 and a profit of $560.
Refer to the above information to answer this question.If the price is $350,what is the optimal output and what is the profit or loss?
A)5 and a profit of $400.
B)5 and a profit of $1,100.
C)6 and a loss of $200.
D)6 and a profit of $450.
E)7 and a profit of $560.
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71
The following table shows the costs for a manufacturer:
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$10.
B)$18.
C)$20.
D)$40.
E)$45.
Refer to the above information to answer this question.What is the value of the shut-down price?
A)$10.
B)$18.
C)$20.
D)$40.
E)$45.
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72
In what situation will a firm incur a loss?
A)When its marginal cost exceeds the price.
B)When its average variable cost is less than the price.
C)When its average fixed cost is less than the price.
D)When the price is below its average total cost at all levels of output.
A)When its marginal cost exceeds the price.
B)When its average variable cost is less than the price.
C)When its average fixed cost is less than the price.
D)When the price is below its average total cost at all levels of output.
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73
Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $70,how many should she produce in order to maximize her profits?
A)0.
B)5.
C)6.
D)7.
E)8.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $70,how many should she produce in order to maximize her profits?
A)0.
B)5.
C)6.
D)7.
E)8.
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74
The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run:
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the price equals the firm's marginal cost,what should the firm do?
A)1.
B)2.
C)3.
D)4.
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the price equals the firm's marginal cost,what should the firm do?
A)1.
B)2.
C)3.
D)4.
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Unlock Deck
k this deck
75
The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run:
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the firm's average variable costs exceed the price,what should the firm do?
A)1.
B)2.
C)3.
D)4.
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the firm's average variable costs exceed the price,what should the firm do?
A)1.
B)2.
C)3.
D)4.
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76
In what situation should a firm shut down in the short run?
A)When its total revenue is less than its total fixed costs at all output levels.
B)When its total revenue exceeds its total variable costs at all output levels.
C)When the price is below its lowest average variable cost at all output levels.
D)When the price is below its lowest average total cost at all output levels.
A)When its total revenue is less than its total fixed costs at all output levels.
B)When its total revenue exceeds its total variable costs at all output levels.
C)When the price is below its lowest average variable cost at all output levels.
D)When the price is below its lowest average total cost at all output levels.
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77
Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $100,what will be her profit or loss at the optimal output?
A)She will break even.
B)A loss of $150.
C)A profit of $140.
D)A profit of $150.
E)A profit of $240.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $100,what will be her profit or loss at the optimal output?
A)She will break even.
B)A loss of $150.
C)A profit of $140.
D)A profit of $150.
E)A profit of $240.
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Unlock Deck
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78
Suppose that the total fixed cost for a guitar manufacturer is $90.The marginal cost of the first guitar produced is $80 and decreases by $10 for the next three guitars produced.Thereafter,the marginal cost increases by $10 for each successive guitar.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $100,how many should she produce in order to maximize her profits?
A)0.
B)6.
C)7.
D)8.
E)9.
Refer to the information above to answer this question.If the manufacturer can sell her guitars for $100,how many should she produce in order to maximize her profits?
A)0.
B)6.
C)7.
D)8.
E)9.
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Unlock Deck
k this deck
79
The following table shows the costs for a manufacturer:
Refer to the above information to answer this question.What is the value of the break-even price?
A)$18.
B)$30.
C)$40.
D)$42.
E)$45.
Refer to the above information to answer this question.What is the value of the break-even price?
A)$18.
B)$30.
C)$40.
D)$42.
E)$45.
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Unlock Deck
k this deck
80
The following questions are based on the key below.Assume that you are given cost and price data for a number of competitive firms at their present output levels.In all cases the marginal cost is increasing.With this information,indicate whether each firm should,in the short run:
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the price exceeds the firm's marginal cost and is above its average variable costs,what should the firm do?
A)1.
B)2.
C)3.
D)4.
1.produce more
2.produce less.
3.shut down
4.cannot be determined from the information.
Refer to the information above to answer this question.If the price exceeds the firm's marginal cost and is above its average variable costs,what should the firm do?
A)1.
B)2.
C)3.
D)4.
Unlock Deck
Unlock for access to all 172 flashcards in this deck.
Unlock Deck
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Unlock Deck
Unlock for access to all 172 flashcards in this deck.
