šŸ·ļø LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION ā†’
Log in
Economics
1
answer
0
watching
294
views

1.If a firm is producing where MR > MC
Answer


A. the revenue gained by producing one more unit of output exceedsthe cost incurred by doing so.


B. the revenue gained by producing one more unit of output equalsthe cost incurred by doing so.


C. the revenue gained by producing one more unit of output is lessthan the cost incurred by doing so.


D. The firm is already maximizing profits because revenue is beingincreased by more than costs.

2.The added revenue that a firm earns from selling an additionalunit of output is
Answer


A. total revenue


B. marginal revenue

C. variable revenue

D. fixed revenue

Watch
1
answer
0
watching
294
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Kelleb Mloyi
Kelleb MloyiLv2
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

A firm is producing where its marginal costs are at the lowest level. What can one most likely infer from this? a. there is either lost opportunity for further profits by producing more, or the firm should shut-down if it is competitive and price is at that low level. b. It is a price-taker who is producing too much. c. It is a monopolist who is producing the socially optimal quantity. d. The firm is producing rationally.

6. A single-price monopolist sets price a. where MR=demand. b. where supply=demand c. from the demand curve at the quantity for which MC=MR. d. where MR=MC.

7. Assume that the Law of Diminishing Marginal Product applies at the current output level of a competitive firm. The price is $20 and, at the current output level, marginal cost is $16 and average total cost is $20. To maximize profits the firm should: a. produce the current output level, since average revenue (price) = average cost. b. produce more since marginal revenue exceeds marginal cost at current output. c. produce less since marginal revenue is always below average revenue. d. any of the above is possible, without further information.

8. Which of the following statements is true? (i) When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price. (ii) When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price. (iii) Average revenue is the same as price for both competitive and monopoly firms. a. (i) only b. (iii) only c. (i) and (ii) d. (ii) and (iii)

9. If a firm in a competitive market triples the number of units of output sold, then total revenue will a. more than triple. b. less than triple. c. exactly triple. d. All of the above are potentially true.

10. When a competitive firm makes a decision to shut down, it is most likely that a. marginal cost is above average variable cost. b. marginal cost is above average total cost. c. price is below the minimum of average variable cost. d. fixed costs exceed variable costs.

Question:

Evaluate the following statement:

In the short-run, information about a perfectly competitive firm's fixed costs is needed to determine both the profit-maximizing level of output and the amount of profit earned when producing that level of output.

Answer:

The profit-maximizing level of output in a perfectly competitive market is determined at the level where marginal revenue (MR) equals marginal cost (MC). Marginal revenue is the additional revenue earned by selling an additional unit of output, while marginal cost is the additional cost of producing an additional unit of output (Farnham, 2014). Additionally, in order to find the amount of profit earned, we need to know the total cost and total revenue amounts. Total cost is the total of variable and fixed cost. Therefore, in short-run production, a firm's fixed cost is needed to determine both the profit-maximizing level of output and the amount of profit earned when producing that level of output.

Farnham, P (2014) Economics for Managers 3rd edition

~Beth

I need a peer reply for this, please.

QUESTION 22

For a perfectly competitive firm, profit maximization (or loss minimization) occurs at the level of output at which

Ā  a.

MR = MC.
Ā  b.

MR = AVC.
Ā  c.

P = ATC.
Ā  d.

MR = ATC.

4 points

QUESTION 23

If MR > MC, then

Ā  a.

profits are being maximized.
Ā  b.

the firm is producing too much of the good to be maximizing profits.
Ā  c.

the firm can increase its profits (or minimize its losses) by increasing output.
Ā  d.

the firm must be incurring losses.

4 points

QUESTION 24

If firms are earning zero economic profits, they must be producing at an output level at which

Ā  a.

price minus marginal cost.
Ā  b.

total revenue equals total costs, in other words, normal profits.
Ā  c.

price equals average variable cost.
Ā  d.

marginal revenue equals marginal cost.
Ā  e.

none of the above

4 points

QUESTION 25

In the theory of perfect competition,

Ā  a.

the market demand curve is horizontal.
Ā  b.

the single firm faces a horizontal demand curve.
Ā  c.

the single firm faces a downward-sloping demand curve.
Ā  d.

the market demand curve is downward sloping.
Ā  e.

b and d

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in