If a profit-maximizing firm in a perfectly competitive market is making an econo

Question

If a profit-maximizing firm in a perfectly competitive market is making an economic profit, then it must be producing a quantity of output where



a. marginal cost is greater than marginal revenue.

b. marginal cost is greater than average total cost.

c. price is greater than marginal cost.

d. price is greater than marginal revenue.

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14.

(Points: 1) If firms exit a market, the



a. market supply curve shifts leftward.

b. output of the industry increases.

c. price of the good falls.

d. economic profit of the incumbent firms decrease.

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15.

(Points: 1) Firms will stop exiting a market if and only if



a. marginal revenue equals average variable cost.

b. marginal revenue equals price.

c. all remaining firms are making zero economic profit.

d. marginal revenue equals marginal cost. If a profit-maximizing firm in a perfectly competitive market is making an economic profit, then it must be producing a quantity of output where marginal cost is greater than marginal revenue. marginal cost is greater than average total cost. price is greater than marginal cost. price is greater than marginal revenue. If firms exit a market, the market supply curve shifts leftward. output of the industry increases. price of the good falls. economic profit of the incumbent firms decrease. Firms will stop exiting a market if and only if marginal revenue equals average variable cost. marginal revenue equals price. all remaining firms are making zero economic profit. marginal revenue equals marginal cost.

Explanation / Answer

c. price is greater than marginal cost.

b. output of the industry increases.

d. marginal revenue equals marginal cost.

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