14 The competitive firm's supply curve is equal toits marginal cost curve.the portion of its marginal cost curve that lies above AC.the portion of its marginal cost curve that lies above AVC.the portion of its marginal cost curve that lies above AFC.A15 Which is an important aspect of the perfectly competitive market thatleads to long run equilibrium?perfect informationfreedom of entry and exitAВprice taking behaviorhomogeneous products16 Long-run market supply curves are downward sloping ifAfirms are identical.Вthe number of firms is restricted in the long run.Cinput prices fall as the industry expands.All of the above.17 A profit maximizing monopolistis guaranteed to lose money because of a lack of competition.is not guaranteed to make a positive profit.is guaranteed to make a positive profit, hence the desire to be amonopolist.is guaranteed to make a non-negative profit, otherwise government wouldstep in to assist.AВCD18 The monopolist's marginal revenue curveAdoesn't exist.Вlies below the demand curve.is identical to the demand curve.Dlies above the demand curve.19 If the inverse demand function for a monopoly's product is p =100 - 2Q,then the firm's marginal revenue function isA-2100 - 4Q.200 - 4Q.200 - 2Q.ВC20 Which of the following could create a cost advantage for a monopoly?better technologylower friction due to better organizationAstandardizationAll of the above. 7 Ais a governance structure where owners are not personallyliable.sole proprietorshippartnershipmixed enterpriseAcorporation8 The figure to the right shows the cost curves for a competitive firm. If thefirm is to earn economic profit, price must exceed$1q|$0MCAВ$515C$10$11AC9 If a profit-maximizing firm finds that, at its current level of production,MR > MC, it willearn greater profits than if MR = MC.increase output.decrease output.A1110AVCshut down.10 Market structure depends uponthe ease of entry and exit.the ability of firms to differentiate their goods and services.Athe number of firms in the market.All of the above.11 A horizontal demand curve for a firm implies thatthe firm is a monopoly.the market the firm is operating in is not competitive.the firm is selling in a competitive market.the products of that firm are very different from other firms' products.A4012 The short run isa period of time in which at least one input cannot be varied.when firms are stuck with sunk costs, unlike the long run.AВCtreated the same way as the long run.a period of time when no inputs can be varied.13 If a competitive firm finds that it maximizes short-run profits by shuttingdown, which of the following must be TRUE?p< AVC for all levels of output.p< AVC only for the level of output at which p= MC.p< AVC only if the firm has no fixed costs.The firm will earn zero profit.AВCD

Supply curve: It represents the relationship between price and the quantity of the product that a…

14 The competitive firm's supply curve is equal to its marginal cost curve. the portion of its marginal cost curve that lies above AC. the portion of its marginal cost curve that lies above AVC. the portion of its marginal cost curve that lies above AFC.

14 The competitive firm's supply curve is equal to its marginal cost curve. the portion of its marginal cost curve that lies above AC. the portion of its marginal cost curve that lies above AVC. the portion of its marginal cost curve that lies above AFC.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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