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7 May 2018

2. Which statement about short-run cost curves is false? A) The average fixed cost curve is always downward sloping. B) The marginal cost curve cuts the average variable and average total cost curves at their maximum points. C) When marginal cost is above average variable cost, average variable cost is rising. D) When marginal cost is below average total cost, average total cost is falling. E) The average total cost curve is U-shaped.

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Patrina Schowalter
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10 May 2018
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Related questions

Consider a market with many firms that have different cost structures.

Unless shutdown or exit is optimal, every firm expands production until ___________.

A.

marginal product is maximized.

B. marginal revenue, marginal cost, and price are all equal

(MR = MC = P)

C. marginal revenue is equal to the minimum of the short-run average total cost.

D. marginal cost is minimized.

To construct the supply curve in a market with many firms with different cost structures, the ___________.

A.

individual supply curves for each firm are added together.

B.

individual average variable cost curves are added together.

C.

minimums of the​ firms' marginal cost curves are linked together.

D.

minimums of the​ firms' long-run average total cost curves are linked together.

The equilibrium price is the ___________.

A.

​long-run average total cost of the last entrant into the market.

B.

the average marginal cost of the firms.

C.

the long-run average total cost of the first entrant into the market.

D.

minimum of the average variable cost of the smallest firm in the market.

In terms of economic profits, early market entrants earn

(negative

zero

positive)

economic profits and the last entrant earns

(negative

zero

positive)

economic profits.

A perfectly competitive firm will choose to shut down when the (price (marginal revenue)/ average total cost) intersects the marginal cost curve below the ( total cost curve average variable cost curve ).

Therefore, the short-run supply curve for a perfectly competitive firm is represented by __________.

A. the portion of the average variable cost curve below marginal cost. B. the portion of the average variable cost curve above marginal cost. C. the portion of the marginal cost curve above the average total cost. D. the portion of the marginal cost curve above average variable cost.

In the long run, the supply curve for a perfectly competitive firm is represented by __________.

A. the portion of the marginal cost curve above the average total cost. B. the portion of the marginal cost curve above average variable cost. C. the portion of the average variable cost curve below marginal cost. D. the portion of the average variable cost curve above marginal cost.

36) A firm will want to increase its scale of plant if A) it is persistently producing on the downward-sloping part of its short-run average total cost curve. B) it is producing below minimum efficient scale. C) marginal cost is below average total cost. D) it is persistently producing on the upward-sloping part of its short-run average total cost curve. E) marginal cost is below average variable cost.

18. In a perfectly competitive firm, at the current level of output, we know that P = MR = MC >AC > AVC. We can tell from this information that if the output of this firm increases by a little bit: (A) average cost is rising, average variable cost is rising, average fixed cost is falling, and marginal cost is rising (B) average cost is falling, average variable cost is falling, average fixed cost is falling, and marginal cost is falling (C) average cost is falling, average variable cost is rising, average fixed cost is falling, and marginal cost is falling (D) average cost is falling, average variable cost is falling, average fixed cost is rising, and marginal cost is falling (E) average cost is rising, average variable cost is rising, average fixed cost is falling, and marginal cost is falling (F) average cost is rising, average variable cost is rising, average fixed cost is rising, and marginal cost is rising (G) average cost is rising, average variable cost is falling, average fixed cost is falling, and marginal cost is rising (H) average cost is falling, average variable cost is rising, average fixed cost is falling, and marginal cost is falling (1) none of the above

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