A perfectly competitive firm at the level of output where P = ATC. earns an econ

Question

A perfectly competitive firm at the level of output where P = ATC. earns an economic profit suffers an economic loss breaks even shuts down If the wool industry is perfectly competitive, the market demand curve for wool is and an individual wool producer's demand curve is downward sloping; horizontal horizontal; downward sloping horizontal; horizontal downward sloping; downward sloping The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its prices by 10%, but all the other pizzerias in town keep their prices the same. Which of the following is most likely to occur? Little Joe's Pizzeria will not be able to sell any pizzas, since it was the only firm to raise its price Little Joe's Pizzeria profits will increase Little Joe's Pizzeria will lose some of its customers the number of customers served by Little Joe's Pizzeria will increase A monopolistically competitive firm is currently selling its output at price of 10. Its marginal cost is 5 and marginal revenue is 5. The firm should to maximize profits continue to produce the same output level decrease output until price equals marginal cost decrease output so that marginal revenue exceeds marginal cost increase output until price equals marginal cost If a monopolist is producing the profit maximizing quantity 22, selling it at the profit maximizing price 11, and the average cost is 7, the firm's profit will be: 80 88 84 132

Explanation / Answer

Answers:

1).   c ( Breaks even0

2).   c ( horizontal , horizontal)

3).   c little joe's pizzeria will loose some of its customers

4). a continue to produce the same output level

5). b 88

5).

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