ECON 260 iwe 3 Price MC Price pa MC o Quantty to) Price ed) of Quantty 30. Refer
ID: 1114620 • Letter: E
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ECON 260 iwe 3 Price MC Price pa MC o Quantty to) Price ed) of Quantty 30. Refer to Figure3, Which of the graphs depicts the situsation for a profit-maximizing firm in a market? a. Panel a. b. Panel b c. Panel c d. Panel d 31. Refer to Figured3. The firm depicted in panel b faces a horiaontal demand curve. If panel b depicts a profit a. it is able to choose the price at which it sells its earning zero economic profit. b. it would not have excess capacity in its production as long as it is c. it could be operating in either a perfectly competitive market or in a monopolisticaly competitive market d the firm can always raise is profi by increasing predaction since comsumers will bey as much as the firm can 32. A monopolistically competitive firm is curently producing 10 units of output. At equal to S information, which of the following is NOT consistent? a. firmis are likely to leave this market in the long run. c. the firm is currently maximizing its profit this level of output the firm is charging a price s10, has marginal revenue equal to $6, has marginal cost equal to S6, and has average total cost equal to $12. From this b. the profits of the firm are negative d. the peofits of the firm are positive 33. For example, advertising that critics of advertising argue that in some markets advertising may a. attract less informed buyers into the market b. attract prodacts of lower quality into the market c. enhance competition in markets to an unnecessary degroe. d. decrease elasticity of demand allowing firms to charge a larger markup over marginal cost uses celebrity endorsements is most likely intended to provide a "pal of product quality. Thus Figure#4 RMUNNICHAExplanation / Answer
30) panel A because MR=MC
31)C. Firm is operating im perfectly competitive market
32)D. Because ATC>price
33)B. Lower quality product also fets benefit from advertisement
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