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5. The short-run total cost function for a perfectly competitive firm is SRTC = 500 + 3q − 5q² + q³. Suppose that, at its short-run profit maximizing quantity, each firm is making a loss but chooses to stay open. Which of the following is/are necessarily true? a. MR = 3-10q + 3q² b. AR < 500/q+3-5q + q² c. P>3-5q+q² d. Both A and B are true. e. All of the above are true.

5. The short-run total cost function for a perfectly competitive firm is SRTC = 500 + 3q − 5q² + q³. Suppose that, at its short-run profit maximizing quantity, each firm is making a loss but chooses to stay open. Which of the following is/are necessarily true? a. MR = 3-10q + 3q² b. AR < 500/q+3-5q + q² c. P>3-5q+q² d. Both A and B are true. e. All of the above are true.

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
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5. The short-run total cost function for a perfectly competitive firm is SRTC = 500 + 3q − 5q² + q³. Suppose that, at its short-run profit maximizing quantity, each firm is making a loss but chooses to stay open. Which of the following is/are necessarily true? a. MR = 3-10q + 3q² b. AR < 500/q+3-5q + q² c. P>3-5q+q² d. Both A and B are true. e. All of the above are true.
Transcribed Image Text:5. The short-run total cost function for a perfectly competitive firm is SRTC = 500 + 3q − 5q² + q³. Suppose that, at its short-run profit maximizing quantity, each firm is making a loss but chooses to stay open. Which of the following is/are necessarily true? a. MR = 3-10q + 3q² b. AR < 500/q+3-5q + q² c. P>3-5q+q² d. Both A and B are true. e. All of the above are true.
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