Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 15, Problem 2MCQ
To determine
A firm producing at which marginal cost exceeds total cost and market price will increase the economic profit by ____ is to be determined.
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The table provides data on a market demand schedule (top two rows) and a firm's average and marginal cost schedules (bottom four rows).
1.
What is the firm's shutdown point?
A firm will stop producing an output in the short run when the market price of the good is _________.
A.
below minimum AVC
B.
equals ATC
C.
below minimum ATC
D.
equals MC
This firm's shutdown point is at a market price of
$ ?
per unit and its profit-maximizing output is
?
units.
Fill in with the correct answer.
Your firm has a price of $5, an average total cost of $7, and an average variable cost of $4. Inthe short run, you should__________ (operate/shut down) because ________exceeds___________. Inthe long run, you should ___________(stay in/exit) the market because________ exceeds___________.
I.
A company produces at an output level where marginal cost is equal to marginal revenue
and has the following revenue and cost levels:
Total revenue = $1,450
Total cost = $1,500
Total variable cost = $1,300
What would you suggest?
a. Shut down.
b. Continue to produce because the loss is less than the total fixed cost.
c. Increase production to lower the marginal cost.
e. Raise the price.
II.
At current long-run production levels, the marginal revenue of a competitive firm is $15 and
the marginal cost of the firm is $15. If the market is perfectly competitive, the firm should
a. cut back on production.
b. stop production all together.
c. produce more.
d. continue producing at current levels.
Chapter 15 Solutions
Foundations of Economics (8th Edition)
Ch. 15 - Prob. 1SPPACh. 15 - Prob. 2SPPACh. 15 - Prob. 3SPPACh. 15 - Prob. 4SPPACh. 15 - Prob. 5SPPACh. 15 - Prob. 6SPPACh. 15 - Prob. 7SPPACh. 15 - Prob. 8SPPACh. 15 - Prob. 9SPPACh. 15 - Prob. 10SPPA
Ch. 15 - Prob. 11SPPACh. 15 - Prob. 1IAPACh. 15 - Prob. 2IAPACh. 15 - Prob. 3IAPACh. 15 - Prob. 4IAPACh. 15 - Prob. 5IAPACh. 15 - Prob. 6IAPACh. 15 - Prob. 7IAPACh. 15 - Prob. 8IAPACh. 15 - Prob. 9IAPACh. 15 - Prob. 10IAPACh. 15 - Prob. 11IAPACh. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 6MCQCh. 15 - Prob. 7MCQCh. 15 - Prob. 8MCQ
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