1)a)In what situation will a firm incur a loss? When its marginal cost exceeds t
ID: 1152570 • Letter: 1
Question
1)a)In what situation will a firm incur a loss?
When its marginal cost exceeds the price.
When its average variable cost is less than the price.
When its average fixed cost is less than the price.
When the price is below its average total cost at all levels of output.
b)
Which of the following refers to the perfectly competitive firm?
It is a price-maker.
It is a price-taker.
It might be either a price-maker or a price-taker.
It is neither a price-maker nor a price-taker.
c)
Refer to the above graph to answer the question. The graph shows a firm in a perfectly competitive market.
If the market equilibrium price is $60, what quantity should the firm produce to realize the greatest profit?
A)
6
B)
7
C)
8
D)
3.5
When its marginal cost exceeds the price.
When its average variable cost is less than the price.
When its average fixed cost is less than the price.
When the price is below its average total cost at all levels of output.
b)
Which of the following refers to the perfectly competitive firm?
It is a price-maker.
It is a price-taker.
It might be either a price-maker or a price-taker.
It is neither a price-maker nor a price-taker.
c)
Refer to the above graph to answer the question. The graph shows a firm in a perfectly competitive market.
If the market equilibrium price is $60, what quantity should the firm produce to realize the greatest profit?
A)
6
B)
7
C)
8
D)
3.5
Explanation / Answer
Q1-a: Answer is When the price is below its average total cost at all level of output Q1-b: Answer is It is a price Taker. Q1-c: Answer is C. 8 Explanation: Equilibrium is where the MR curve which is horozontal to X-axis at $60 is equal to MC curve. The perpendicular drawn at X-axis t know the equilibrium quantity.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.