Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 15, Problem 5MCQ
To determine
The correct option in case of the short run profit maximizing firm is to be determined.
Expert Solution & Answer
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Check out a sample textbook solutionStudents have asked these similar questions
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.
Below is a graphical illustration of a
typical firm operating in a
monopolistically competitive industry:
P5
P4
P3
P2
P1
H
Q1 Q2 Q3
Refer to the graph above to answe
question. Which of the following
statements is correct?
ATC
S
There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices.
a. ABC gained market power through
economies of scale
government protection
control of an important input
.
b. ABC’s market power
does
does not
guarantee that the firm makes an economic profit.
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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- a. Why, in perfect competition, is the marginal revenue curve perfectly elastic? b. Why is the marginal cost curve shaped the way it is?arrow_forwardThe 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.arrow_forwardThe apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 per cent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit. In the long run, the ________. Select one: A. increases; zero; price of apples will return to its original level B. increases; zero; orchards will be replanted and economic profit will return to zero C. increases; positive; orchards will be replanted and economic profit will return to zero D. remains the same; zero; orchards will be replanted and growers will make normal profitsarrow_forward
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- in which of the following statement is true? (choose one letter only) a. the Marginal Revenue is the approximate revenue from the production and sale of the x+1 unit after x units have been sold.b. the Marginal Cost is the approximate cost of producing the x−1 unit before x units have been produced. c. the Marginal Profit is the profit from the production and sale of the xth unit. d. All of these e. none of the abovearrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for surearrow_forwardWhat is Economic Profit as compared to the Financial Profit? To compute Economic Profits, which costs are used? Give examplearrow_forward
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