PLEASE ANSWER ALL QUESTIONS The MR = MC rule applies: only when the firm is a \"

Question

PLEASE ANSWER ALL QUESTIONS

The MR = MC rule applies: only when the firm is a "price taker." to firms in all types of industries. only to monopolies. only to purely competitive firms. Answer questions 2 through 4 based on the graph below of a perfectly competitive firm The profit maximizing level of output for the firm is equal to___units. (put your answer on the answer sheet.) At the profit maximizing level of output, the firm is earning an economic loss equal to $ 123.50. an economic loss equal to $ 119.00. an economic loss equal to $ 187.00. a normal profit What will the firm choose to do in the short-run and why? shut down because the firm incurs an economic loss stay in business because it is earning a normal profit stay in business because the firm's economic loss is less than fixed costs stay in business because tire firm is making an economic profit An example of a perfectly competitive industry is the market for corn in the United States. a big city police department. the market for French impressionists' paintings. the National Football League.

Explanation / Answer

1. The MR=MC rule applies:

B. To firms in all types of industries.

2. The profit-maximizing level of output for the firm is equal to 17 units,

3. At the profit-making level of output:

B. An economic loss equal to $119.00

4. What will the firm choose to do in the short-run and why?

C. Stay in business because the firm's economic loss is less than fixed cost.

5. An example of a perfectly competitive industry is:

A. The market for corn in the United States.

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