1.Sadie's Cleaning Services is a perfectly competitive firm that currently cleans 20 offices an evening. Sadie's marginal cost is less than the price it charges. Sadie's will increase its profit if it cleans: option 1: fewer than 20 offices an evening option 2: more than 20 offices an evening option 3: 20 offices an evening but increases its price option 4: more than 20 offices an evening and charges a higher price
1.Sadie's Cleaning Services is a perfectly competitive firm that currently cleans 20 offices an evening. Sadie's marginal cost is less than the price it charges. Sadie's will increase its profit if it cleans: option 1: fewer than 20 offices an evening option 2: more than 20 offices an evening option 3: 20 offices an evening but increases its price option 4: more than 20 offices an evening and charges a higher price
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please solve this 4 mcq questions correctly.
![1.Sadie's Cleaning Services is a perfectly competitive firm that currently cleans 20 offices an
evening. Sadie's marginal cost is less than the price it charges. Sadie's will increase its profit if it
cleans:
option 1: fewer than 20 offices an evening
option 2: more than 20 offices an evening
option 3: 20 offices an evening but increases its price
option 4: more than 20 offices an evening and charges a higher price
2.Tammy sells woolen hats in a perfectly competitive market. The marginal cost of producing 1
hat is $12. The marginal cost of producing a second hat is $14 and the marginal cost of
producing a third hat is $16. The market price of a hat is $14. To maximize profit, how many
hats should Tammy produce everyday?
option 1: 1 hat
option 2: 2 hats
option 3: 3 hats
option 4: As many hats as possible
3.Which of the following is true for a natural monopoly? [More than 1 correct option]
option 1: The firm can supply the entire market at a lower cost than two or more firms could.
option 2: Its average total cost curve slopes upward as it intersects the demand curve
option 3: The firm is not protected by any barrier to entry.
4.Deadweight loss occurs in Monopoly market because- [More than 1 correct option]
option 1: Price charged by a monopolist is higher than perfectly competitive market
option 2: A monopolist makes greater profit by producing at the minimum possible long-run
average cost.
option 3: For a monopoly market marginal benefit equals marginal cost.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff6300abe-9462-401d-a1ec-1be24df95454%2Fa496bf70-872f-47e9-859a-536ac66aa3df%2F9q1r74j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1.Sadie's Cleaning Services is a perfectly competitive firm that currently cleans 20 offices an
evening. Sadie's marginal cost is less than the price it charges. Sadie's will increase its profit if it
cleans:
option 1: fewer than 20 offices an evening
option 2: more than 20 offices an evening
option 3: 20 offices an evening but increases its price
option 4: more than 20 offices an evening and charges a higher price
2.Tammy sells woolen hats in a perfectly competitive market. The marginal cost of producing 1
hat is $12. The marginal cost of producing a second hat is $14 and the marginal cost of
producing a third hat is $16. The market price of a hat is $14. To maximize profit, how many
hats should Tammy produce everyday?
option 1: 1 hat
option 2: 2 hats
option 3: 3 hats
option 4: As many hats as possible
3.Which of the following is true for a natural monopoly? [More than 1 correct option]
option 1: The firm can supply the entire market at a lower cost than two or more firms could.
option 2: Its average total cost curve slopes upward as it intersects the demand curve
option 3: The firm is not protected by any barrier to entry.
4.Deadweight loss occurs in Monopoly market because- [More than 1 correct option]
option 1: Price charged by a monopolist is higher than perfectly competitive market
option 2: A monopolist makes greater profit by producing at the minimum possible long-run
average cost.
option 3: For a monopoly market marginal benefit equals marginal cost.
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