Fall 2017 C. Charge a higher price to college students D. Charge a higher price
ID: 1130598 • Letter: F
Question
Fall 2017 C. Charge a higher price to college students D. Charge a higher price to business executives 5. In a long-run cosu isbriun, monopolistically competitive firms produce where: B. marginal revenue is equal to price. C. average total cost is equal to price D. marginal revenue is greater than marginal cost. 6. A business owner makes 50 items by hand in six hours. She could have earned $20 an hour working for someonc else. If each item sells for $10 and the explicit costs total S100, accounting profit for 50 items is: A. $280 B. $400. C. $500 D. $300. Refer the table below for Questions 7 and 8 Number of workers Total output 15 21 26 28 29 29 27 7. Refer to the table shown. The average product when three workers are employed is: B. 4 C. 5 Refer to the table shown. Diminishing marginal productivity begins when the: A. third worker is hired. B. fourth worker is hired. C. fifth worker is hired. D. sixth worker is hired. 8.Explanation / Answer
5. C
In a Monopolist competitive environment, a firm produces differentiated products and hence has a degree of control over the price in Short run but in long run, the firm makes 0 Economic Profits. Hence, it produces where Average Total Cost is equal to the Price.
6. B
Accounting profits will take the Revenue and cost of operating.
Revenue for 50 items is 500 and cost is 100. Thus, accounting profits are 400.
7. C
Average product is the total output divides by the number of workers, i.e. 15/3 = 5
8. D
Marginal Product
Till the 1st worker is 3
Till the 2nd worker is 4
Till the 3rd worker 5
Till the 4th worker 5.2
Till the 5th worker 5.2
Till the 6th worker is 4.6
Thus, we can see that it diminishes when 6th worker is hired.
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