CONNECT F/MICROECONOMICS
21st Edition
ISBN: 2810022151240
Author: McConnell
Publisher: MCG
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Question
Chapter 10.3, Problem 4QQ
To determine
Changes in marginal revenue and marginal cost.
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Students have asked these similar questions
The competitive firm maximizes its profit by operating at the point where _____ and price is greater than average variable cost.
a. average cost is at a minimum
b. total revenue is at a maximum
c. profit per unit is at a maximum
d. marginal cost equals price
A profit-maximizing firm in a competitive market is currently producing 500 units of output. It has
average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b.
What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more
than, less than, or exactly 100 units?
A competitive firm maximizes profit when marginal cost:
a. equals the price.
b. is less than the price.
c. is minimized.
d. is greater than the price.
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- Revenue and cost (dollars per unit) MC AVC 50 40 30 20 10 10 20 30 40 50 Output (units per day) The above figure illustrates a perfectly competitive firm. If the market price is $40 a unit, to maximize its profit (or minimize its loss) the firm should Select one: a. produce 30 units. b. produce more than 30 units and less than 40 units. c. produce 40 units. d. shut down. e. produce more than 10 and less than 30 units.arrow_forwardPart A. When the demand curve is given by P1 = $30, and the firm behaves optimally in the short run, what is the total revenue? A. $ 900 B. $1350 C. $800 D. $2400 Part B. When the demand curve is given by P1 = $30, how much profit is this producer earning? A. $ 500 B. $ 800 C. $ 1200 D. $ 1600 Part C. Does the graph above represent the firm’s short run equilibrium or long run equilibrium, for a given price? A. short run B. long run C. short run or long run D. neither short run nor long runarrow_forwardCurrently the firm is producing at a profit maximizing quantity of output and has a total revenue of $5000. Variable costs are $4000 and Fixed costs are $2000. Which of the following is true for this firm in the short run: A. The firm should continue producing at a loss B. The firm should shut down immediately C. The firm should continue to produce since it is making profit D. The firm should adjust (increase or decrease) outputarrow_forward
- Explanation it correctly and details. Solve only when correctly solution providesarrow_forwardRevenue and cost (dollars per unit) 50 40 30 20 10 0 10 20 MC........... ATC AVC www. 30 40 50 Output (units per day) a. If market price is $40, what is this firm's profit maximizing output level? b. If price is $15, with this firm produce or shut-down? Why? c. If price is $20, what is the amount of profit earned by this firm? d. What is the shut-down point for this firm?arrow_forward(a) Calculate this firm’s marginal cost for output level 5. (b) Calculate this firm’s marginal cost for output level 6. (c) What is the average total cost at which, this firm reaches its break even-point? (d) What is the average variable cost at which, this firm reaches its shut-down point?arrow_forward
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