700 600 550 500 350 300 250 200 150 100 P-MR B ATC AVC 1 23456789 10 11 12 15,.

Question

700 600 550 500 350 300 250 200 150 100 P-MR B ATC AVC 1 23456789 10 11 12 15,. Refer to the graph above of a profit-maximizing firm. For this firm total costs are: a. $400 b. $1600 c. $2000 d. $2800 16. In an oligopolistic market there is likely to be: a. Little consideration of the actions of rival firms b. Price taking behavior on the part of firms c. Homogeneous but not differentiated products d. Neither allocative nor productive efficiency 17. A perfectly competitive firm in the long run: a. can earn positive or negative economic profits. b. can earn negative accounting profits as long as economic profits are positive. makes zero economic profits. . makes zero accounting profits.

Explanation / Answer

15)'. Total Cost = Cost * Quantity = 250 * 8 = 2000 (c)

16). c). Oligopoly is just like monopoly, except thereby are more than one firm in the economy. Thus, the answer is c), which means the products are homogeneous but not differentiated. OPEC is an example

17) b). Can earn negative accounting profits as long as economic profits are positive. This means ATC = P in the long run.

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