When a competitive firm operates at efficient scale, a) its average revenue is n

Question

When a competitive firm operates at efficient scale, a) its average revenue is not equal to the minimum of average total cost. b) its average revenue must be equal to the minimum of average total cost. c) the average total cost must be falling.

Generally speaking, the larger the number of firms in an oligopolistic industry the more difficult it is for these firms to behave collusively. A) true b) false.

A monopolistic firm’s average revenue curve would lie below its demand curve. a) true b) false.

When a monopolist produces at MR = MC, it makes positive profits. a) true b)false.

Output AFC AYC ATC MC $300 $100 $400 $100 50 60 80 150 100 75 60 50 43 38 75 70 73 80 90 103 119 138 160 223 170 148 140 140 146 156 2 3 4 110 140 180 230 290 360 190 10 30

Explanation / Answer

1) The answer is B-) ts average revenue must be equal to the minimum of average total cost.

because the efficient scale of production is the point where the competitive firm is at long run equilbruim. and long run equilbruim is where the MR=AR =ATC (minimum) .

2) The answer is A -) TRUE.

3) THe answer is B) FALSE.

because for a monopoly, its demand curve is a average revenue curve. so , D=AR.

4) The answer is B-) FALSE.

because when it produce at MR=MC, it maximize its profit rathet then profits is positive.

5) The answer is B -) UNit 2- .because at this output P =AVC

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