1. When operating, the loss minimization point is A. When at the minimum point o
ID: 1099424 • Letter: 1
Question
1. When operating, the loss minimization point is
A. When at the minimum point on the average total cost curve.
B. When at the minimum point on the average variable cost curve.
C. Where marginal cost equals marginal revenue.
D. When total revenue is maximized.
2. The quantity corresponding to the point where the distance between price and ATC is the greatest results in a maximum__________; but the firm wishes to maximize_________.
A.Total profit; profit per unit
B.profit per unit; total profit
C. total profit; total profit
D.profit per unit; profit per unit
3.When MC>MR, the profit maximizing firm should
A.keep production unchanged.
B. increase production.
C.decrease production
D. shut down
C. go out of business
4.Total revenue divided by output equals
A.Marginal cost
B. Average total cost
C. Price
D. Average variable cost
5.Which curve tells us the output at which a firm is producing at peak efficiency?
A.AFV
B.AVC
C. ATC
D. demand
6.A company is operating most efficiently when it is at
A. the break-even point
B. the shutdown point
C.both the break-even and shutdown points
D. neither the break-even nor the shutdown points
7. A Firm will shut down if price is below
A. marginal cost
B. marginal revenue
C. average total cost
D. average fixed cost
E. average variable cost
Explanation / Answer
1. C. Where marginal cost equals marginal revenue
2. B.profit per unit; total profit
3. C.decrease production
4. C. Price
5. C. ATC
6. D. neither the break-even nor the shutdown points
7. E. average variable cost
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