For a perfectly competitive firm, when MC is less than MR, A. economic profits must be...
For a perfectly competitive firm, when MC is less than MR,
A.
economic profits must be positive.
B.
the producer has an incentive to decrease output.
C.
the producer has an incentive to expand output.
D.
the producer has no incentive to change production
Homework Answers
Answer : The answer is option C.
For perfectly competitive firm the profit maximizing condition is MR = MC. If production level increase then MC increase. Now if MC is less than MR then to reach at profit maximizing condition the producer will increase the production level. Hence except option C other options are not correct. Therefore, option C is the correct answer.
Add Answer to:
For a perfectly competitive firm, when MC is less than MR,
A.
economic profits must be...
In the short run, a perfectly competitive firm is producing where MR-MC. At this output, P>AVC...
In the short run, a perfectly competitive firm is producing where MR-MC. At this output, P>AVC and P>ATC. This firm A) is making positive economic profits B) is making zero economic profits C) is making negative economic profits but should continue to operate D) is making negative economic profits and should shut down.
QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not...
QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not likely earn an economic profit in the long run. shut down in the short run if price is less than average variable cost. all of the above. QUESTION 6 A monopolistic competitive firm is inefficient because the firm: earns positive economic profit in the long run. is producing at an output corresponding to the condition that marginal cost equals price. is not maximizing its...
a) Why is a monopolistically competitive firm less efficient than a perfectly competitive firm? It produces...
a) Why is a monopolistically competitive firm less efficient than a perfectly competitive firm? It produces at an output that is lower than its minimum efficient scale (MES) It earns positive economic profits in the long run It deters entry of new firms by putting up entry barriers All of the answers are correct b) Suppose a monopolistically competitive firm has MC=4Q+5. Its demand is P=145-3Q and marginal revenue is MR=145-6Q. What is its profit-maximizing output level? 17 14 16...
2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the...
2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the market supply curve to shift rightwards, but the market does not reach its long run state. a. Draw two corresponding graphs, side-by-side, that allustrate this shift. One is the market supply and demand graph, and the other is the profit-maximizing production choice of a typical firm. Using your graph, explain b. How do price and marginal revenue change as firms enter c. How do MC...
If a firm operating in a perfectly competitive industry maximizes short-run profits by producing some quantity...
If a firm operating in a perfectly competitive industry maximizes short-run profits by producing some quantity of output q* > 0, which of the following must be true at that level of output? A) p > MC B) MR > MC C) p ≥ AVC D) All of the above E) B and C only
The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is...
The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is perfectly vertical. maybe downward or upward sloping, depending upon the type of product offered for sale. In the short run, the best policy for a perfectly competitive firm is to Question 17 options: shut down its operation if the price ever falls below average total cost. produce and sell its product as long as price is greater than average variable cost. shut down its...
8. A perfectly competitive firm is earning an economic profit. In the short run it should...
8. A perfectly competitive firm is earning an economic profit. In the short run it should In the long run it should A. shut down; expand B. produce where MC = MR; leave the industry C. produce where MC = MR; expand production D. shut down; exit the industry 9. In the long-run equilibrium of a competitive market with identical firms, what is the relationship between price P, marginal cost MC, and average total cost ATC? A. P> MC and...
QUESTION 6 A perfectly competitive firm will maximize profit where: a. MC> MR b. MC<MR C....
QUESTION 6 A perfectly competitive firm will maximize profit where: a. MC> MR b. MC<MR C. MR M d. MC MR
If a perfectly competitive firm is producing at the P MC output and realizing an economic...
If a perfectly competitive firm is producing at the P MC output and realizing an economic profit, at that output Multiple Choice marginal revenue is less than price. marginal revenue exceeds ATC ATC is being minimized total revenue equals total cost
If a perfectly competitive firm is producing a quantity where MC < MR, then profit: Select...
If a perfectly competitive firm is producing a quantity where MC < MR, then profit: Select one: a. can be increased by decreasing production. b. is maximized. c. can be increased by increasing production. d. can be increased by decreasing the price.
In the short run, a perfectly competitive firm is producing where MR-MC. At this output, P>AVC and P>ATC. This firm A) is making positive economic profits B) is making zero economic profits C) is making negative economic profits but should continue to operate D) is making negative economic profits and should shut down.
2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the market supply curve to shift rightwards, but the market does not reach its long run state. a. Draw two corresponding graphs, side-by-side, that allustrate this shift. One is the market supply and demand graph, and the other is the profit-maximizing production choice of a typical firm. Using your graph, explain b. How do price and marginal revenue change as firms enter c. How do MC...
8. A perfectly competitive firm is earning an economic profit. In the short run it should In the long run it should A. shut down; expand B. produce where MC = MR; leave the industry C. produce where MC = MR; expand production D. shut down; exit the industry 9. In the long-run equilibrium of a competitive market with identical firms, what is the relationship between price P, marginal cost MC, and average total cost ATC? A. P> MC and...
QUESTION 6 A perfectly competitive firm will maximize profit where: a. MC> MR b. MC<MR C. MR M d. MC MR
If a perfectly competitive firm is producing at the P MC output and realizing an economic profit, at that output Multiple Choice marginal revenue is less than price. marginal revenue exceeds ATC ATC is being minimized total revenue equals total cost
Most questions answered within 3 hours.
-
A local
electronic company primarily manufactures four highly technical
telecommunication products. Each product must be processed...
asked 1 hour ago -
•Describe the basic structure of collagen monomers •Explain how
amino acid composition of collagen contributes to...
asked 2 hours ago -
Compute the sample correlation coefficient
r for each of the following data sets.
(Use 3 decimal...
asked 3 hours ago -
5a. What are the advantages and disadvantages of Proxy ARP?
b. What is the TTL field...
asked 3 hours ago -
An ice cube (density = 900[kg/m3]) with a side length of
2.54[cm] is held by a...
asked 4 hours ago -
would you say that leaders in the international context are born
or made? That is, can...
asked 5 hours ago -
Instructions
Read the Digital Trends article "Solid state drives are speedier
than hard disk drives. Are...
asked 5 hours ago -
A multiple-choice test consists of 29 questions with possible
answers of a, b, c, d. Estimate...
asked 5 hours ago -
Question 1: Ethanol is the active ingredient of alcoholic
beverages. It is also s a possible...
asked 5 hours ago -
In the process of a simple distillation, the substances in the
still head tube are in...
asked 5 hours ago -
In a normal distribution with mean 3 and standard deviation of
7, what are the upper...
asked 5 hours ago -
A big block stone with mass M explodes and splits in two pieces
with mass 0.40M...
asked 5 hours ago