5-01) Principles of Economics .01) Principles of Economics Micro 2 Perfect Compe

Question

5-01) Principles of Economics .01) Principles of Economics Micro 2 Perfect Competition (Ch 8) Quiz 4 Question E Not yet answered Marked out of 1.00 P Flag question Which of the following is NOT a characteristic of a competitive market? Select one: O O O a. Profit is maximized where marginal revenue equals price b. There are many buyers and sellers with easy entry and exit c. Each seller produces the same good d. In order to sell more output, a competitive firm must lower price Previous page Costs of production (Ch 7) Quiz 3 Jump to...

Explanation / Answer

In order to sell more output a competitive firm must lower its price is not a characteristic of competitive market. The demand of a typical perfectly competitive firm is perfectly elastic,horizontal. Total Revenue for producing 8 units of output is $100.Total revenue for producing 9 units of output is $125.Given the information the marginal revenue for producing he ninth unit is $25. A competitive firm has the following cost and revenue characteristics at its current level of output.Price=$8,Average variable cost=$6,Average fixed cost=$4this firm is making a profit of $2 and should expand. Cease production immediately since it is incurring a loss and does not cover daily costs.

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