Figure #2: The cost structure for a firm in a competitive market. MC Price Cost 9 7 3 20 30 40 AVC ATC Quantity 10. Refer to Figure #2. When price falls from $7 to $3, the firm finds that a. its profit loss can be minimized by producing output at 20 units. c. fixed costs are lower at a production level of 30 units. b. it can earn a positive profit by producing its output at 30 units. d. it can earn a positive profit by increasing its output to 40 units. 11. Refer to Figure #2. When price rises from $7 to $9, the firm finds that a. its profit loss can be minimized by producing output at 20 units. b. it can earn a positive profit by producing its output at 30 units. d. it can earn a positive profit by increasing its output to 40 units. c. fixed costs are lower at a production level of 30 units. 12. Refer to Figure #2. In short run, the firm will shut down temporarily if it realizes that the market price is between $3 and $7. Under such circumstance, the firm a. still has to pay its variable costs, but not its fixed costs. c. still has to pay both its variable costs and its fixed costs. b. still has to pay its fixed costs, but not its variable costs. d. has to pay neither its variable costs nor its fixed costs. 13. Refer to Figure #2. The short-run supply curve for a firm in a perfectly competitive market is a. the portion of its marginal cost curve that starts from min(AVC)= $3 and upward beyond along the MC curve. b. the portion of its marginal cost curve that starts from min(ATC)= $7 and upward beyond along the MC curve. d. the portion of its marginal starting at $9 and beyond. c. horizontal at the price $7. 14. Refer to Figure #2. The long-run supply curve for a firm in a perfectly competitive market is a. the portion of its marginal cost curve that starts from min(AVC)= $3 and upward beyond along the MC curve. b. the portion of its marginal cost curve that starts from min(ATC) = $7 and upward beyond along the MC curve. d. the portion of its marginal starting at $9 and beyond. c. horizontal at the price $7.
Figure #2: The cost structure for a firm in a competitive market. MC Price Cost 9 7 3 20 30 40 AVC ATC Quantity 10. Refer to Figure #2. When price falls from $7 to $3, the firm finds that a. its profit loss can be minimized by producing output at 20 units. c. fixed costs are lower at a production level of 30 units. b. it can earn a positive profit by producing its output at 30 units. d. it can earn a positive profit by increasing its output to 40 units. 11. Refer to Figure #2. When price rises from $7 to $9, the firm finds that a. its profit loss can be minimized by producing output at 20 units. b. it can earn a positive profit by producing its output at 30 units. d. it can earn a positive profit by increasing its output to 40 units. c. fixed costs are lower at a production level of 30 units. 12. Refer to Figure #2. In short run, the firm will shut down temporarily if it realizes that the market price is between $3 and $7. Under such circumstance, the firm a. still has to pay its variable costs, but not its fixed costs. c. still has to pay both its variable costs and its fixed costs. b. still has to pay its fixed costs, but not its variable costs. d. has to pay neither its variable costs nor its fixed costs. 13. Refer to Figure #2. The short-run supply curve for a firm in a perfectly competitive market is a. the portion of its marginal cost curve that starts from min(AVC)= $3 and upward beyond along the MC curve. b. the portion of its marginal cost curve that starts from min(ATC)= $7 and upward beyond along the MC curve. d. the portion of its marginal starting at $9 and beyond. c. horizontal at the price $7. 14. Refer to Figure #2. The long-run supply curve for a firm in a perfectly competitive market is a. the portion of its marginal cost curve that starts from min(AVC)= $3 and upward beyond along the MC curve. b. the portion of its marginal cost curve that starts from min(ATC) = $7 and upward beyond along the MC curve. d. the portion of its marginal starting at $9 and beyond. c. horizontal at the price $7.
Chapter1: Making Economics Decisions
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Transcribed Image Text:Figure #2: The cost structure for a firm in a competitive market.
MC
Price
Cost
9
7
3
20
30 40
AVC
ATC
Quantity
10. Refer to Figure #2. When price falls from $7 to $3, the firm finds that
a. its profit loss can be minimized by producing output at 20 units.
c. fixed costs are lower at a production level of 30 units.
b. it can earn a positive profit by producing its output at 30 units.
d. it can earn a positive profit by increasing its output to 40 units.
11. Refer to Figure #2. When price rises from $7 to $9, the firm finds that
a. its profit loss can be minimized by producing output at 20 units. b. it can earn a positive profit by producing its output at 30 units.
d. it can earn a positive profit by increasing its output to 40 units.
c. fixed costs are lower at a production level of 30 units.
12. Refer to Figure #2. In short run, the firm will shut down temporarily if it realizes that the market price is between $3 and $7.
Under such circumstance, the firm
a. still has to pay its variable costs, but not its fixed costs.
c. still has to pay both its variable costs and its fixed costs.
b. still has to pay its fixed costs, but not its variable costs.
d. has to pay neither its variable costs nor its fixed costs.
13. Refer to Figure #2. The short-run supply curve for a firm in a perfectly competitive market is
a. the portion of its marginal cost curve that starts from min(AVC)= $3 and upward beyond along the MC curve.
b. the portion of its marginal cost curve that starts from min(ATC)= $7 and upward beyond along the MC curve.
d. the portion of its marginal starting at $9 and beyond.
c. horizontal at the price $7.
14. Refer to Figure #2. The long-run supply curve for a firm in a perfectly competitive market is
a. the portion of its marginal cost curve that starts from min(AVC)= $3 and upward beyond along the MC curve.
b. the portion of its marginal cost curve that starts from min(ATC) = $7 and upward beyond along the MC curve.
d. the portion of its marginal starting at $9 and beyond.
c. horizontal at the price $7.
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