x.Hm50. A firm that is experiencing diminishing returns inmanagement\'s ability
ID: 1238224 • Letter: X
Question
x.Hm50. A firm that is experiencing diminishing returns inmanagement's ability to use and disseminate information as it increasesproduction in the long run is an example of ______. (Points: 3)economies of scale
diseconomies of scale
being too small for the relevant market
not having enough managers
51. Individuals in a market who must take the market price as given are ______. (Points: 3)
quantity minimizers
quantity takers
price takers
price searchers
52. If a perfectly competitive firm sells 30units of output at a price of $10 per unit, its marginal revenue is______. (Points: 3)
$10
more than $10
less than $10
$300
53. For a firm producing at any level of output less than the most profitable one, an increase in output adds ______. (Points: 3)
more to total cost than to total revenue
more to total revenue than to total cost
the same amount to total revenue as to total cost
to total revenue but not to total cost
54. If price is greater than average totalcost at the profit-maximizing quantity of output in the short run, aperfectly competitive firm will _____. (Points: 3)
produce at a loss
produce at a profit
shut down production
produce more than the profit-maximizing quantity
55. In the short run, a perfectly competitive firm produces output and earns zero economic profit if _____. (Points: 3)
P > ATC
P = ATC
P < AVC
AVC > P > ATC
56. When economic profits in an industry are zero ______. (Points: 3)
firms are really doing badly
it means that firms are doing as well as they could do in other markets
firms should exit, so they can make an economic profit in some other market
the industry is not in long-run equilibrium
57. When a perfectly competitive firm is in long-run equilibrium, the firm is _____. (Points: 3)
producing at maximum average total cost
producing at maximum average variable cost
producing at minimum marginal cost
producing at minimum long-run average total cost
58. A decrease in production costs for firms in a perfectly competitive market will cause a(n) ______. (Points: 3)
permanent increase in price
economic profit for firms in the short run
increase in demand
increase in firms' marginal revenue
59. A curve that shows the quantity of a goodor service supplied at various prices after all long-run adjustments toa price change have been completed is a long-run ______. (Points: 3)
marginal revenue curve
marginal cost curve
industry supply
Explanation / Answer
51. Please note that the individuals aretaking the market price. The questiondoesn't discuss quantity.
52. Marginal revenue is defined as the revenue (corporateincome) generated by the sale of one additionalgood.
53. The question implies that the firm is now producing belowmaximum profitability. Thus, if output is increased, so is profit.Profit equals the total revenue - total cost.
54. The price is greater than the average total cost. Think ofprice as marginal revenue and average total cost as the costassociated with each good. Thus, the revenue gained from each goodis greater than the cost of each in the situation described.
55. Firms don't earn profit when total revenue = total cost.Think of price as marginal revenue and average total cost as thecost for each good. Also, price x quantity = total revenue, andaverage total cost x quantity = total cost.
56. Remember that economic profits imply implicit costs andimplicit revenue and thus imply opportunity cost.
57. Unfortunately, we haven't covered this in mymicroeconomics class.
58. Remember, less cost means that firms can lower theirprices. Less cost also shifts the supply curve rightwards; thedemand curve isn't affected. Marginal revenue changes with price;less cost affects marginal cost. Lowered costs affect total cost,and profit = total revenue - total cost.
59.The marginal revenue curve corresponds with price, whichremains constant. Unfortunately, we haven't covered the otherterms.
60. For reference, I have included Wikipedia's definition ofutility. In economics, utility is a measure ofthe relative satisfaction from, or desirabilityof, consumption of various goods andservices.
I hope this helps. I apologize that theresponse is not comprehensive. Good luck on your test!
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