QUESTION 4 Which of the following distinguishes the short run from the long run in pure competition? O A. Firms can enter and exit the market O B. Firms attempt to maximize profits OC. Firms use the MR - MC rule to in the long run but not in the short O D. The quantity of labor hired in the long run but not in the short maximize profits in the short run but can vary in the long run but not in the short run run run not in the long run

QUESTION 4 Which of the following distinguishes the short run from the long run in pure competition? O A. Firms can enter and exit the market O B. Firms attempt to maximize profits OC. Firms use the MR - MC rule to in the long run but not in the short O D. The quantity of labor hired in the long run but not in the short maximize profits in the short run but can vary in the long run but not in the short run run run not in the long run

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose we have a firm in a perfectly competitive market. Assume that we have the usual shaped cost curves. At a market price of $15 the profit maximizing firm produces 53 units. Something changes that causes the firm to produce a quantity of zero at a price of $15 in the short-run. Which of the changes below can explain the change in the firm's behavior? O An increase in the fixed cost and a decrease in the marginal cost. O An increase in the fixed cost. O An increase in the marginal cost. O A decrease in the market price.
Figure shows the cost structure of a firm in a perfectly competitive market. at the market price $30, the break-even output is: Р. $30-- $25 $13 $5 O a. 1,000 O b. 450 O c. 30 O d. 800 450 MC 800 1,000 AT AV
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Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, marginal cost exceeds this firm's price. Assuming price exceeds average variable cost, to maximize profits Cathy's should O a. stop producing since it is earning a loss. O b. decrease their output. Oc make no adjustments as they are already maximizing their profits. Od. increase their output. Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5.000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces more, the costs of Kyle's factory will exceed those of Stan's factory. Ob. more, their costs will be equal. less, the costs of Kyle's factory will exceed those of Stan's factory. Od. less, their costs will be equal. If a firm is producing where…
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