A profit-maximizing firm with market power will always produce a level of output where
a. demand is elastic.
b. demand is inelastic.
c. price is greater than average total cost.
d. marginal revenue is greater than average total cost.
Answer
Option
a. demand is elastic.
A firm with power has a downward-sloping demand curve and it producer at MR=MC where MC>0 and demand is elastic when MR>0, MR=0 then unit elastic and MR<0 then inelastic.
A profit-maximizing firm with market power will always produce a level of output where a. demand...
A profit maximizing firm will produce at the level of output where: O A. price is equal to average variable costs O B. price is equal to marginal revenue O C. marginal revenue is equal to marginal costs O D. none of the above
When will a profit-maximizing firm in a competitive market always make marginal adjustments to production? Select one: O a. as long as average revenue is greater than average total cost b. as long as average revenue is equal to marginal cost c. as long as price is above or below marginal cost O d. as long as marginal cost is greater than average total cost
Show work pretty please. 30. Average total cost a. b. c. d. e. increases as output increases. decreases as output increases. increases if marginal cost is increasing increases if marginal cost is greater than average total cost. both c and d 31. Amonopolist which suffers losses in the short run will continue to operate as long as total revenue covers fixed cost. raise price in order to eliminate losses exit in the long run if there is no plant size...
Part VI Multiple Choice: Imperfect Competition 13. If a firm with market power maximizes profit by producing at the unit elastic point on the demand curve, then a. it has no direct competitors. b. its marginal cost must be zero at the profit-maximizing level of output. c. demand must be perfectly elastic. d. it cannot be in long-run equilibrium 14. Which of the following statements is not always true for a monopolist in short-run equilibrium? a. E 21 b. TR>...
If a monopolistically competitive firm is producing the profit-maximizing level of output and is earning an economic profit in the short run: Select one: a. marginal revenue is less than marginal cost. b. price is less than average total costs. c. price is less than marginal cost. d. marginal revenue equals marginal cost.
Part VI Multiple Choice: Imperfect Competition 13. If a firm with market power maximizes profit by producing at the unit elastic point on the demand curve, then a. it has no direct competitors. b. its marginal cost must be zero at the profit-maximizing level of output. c. demand must be perfectly elastic. d. it cannot be in long-run equilibrium. 14. Which of the following statements is not always true for a monopolist in short-run equilibrium? a. E 1 b, TR>...
Question 2: A monopolistic firm produces goods in a market where the demand function is P = 43 - 0.3Q and the corresponding total cost function is TC =0.0103 – 0.4Q2 +3Q (a) What can you say about the fixed costs of this firm? (b What can you say about the variable costs of this firm? (c) Find the (non-zero) output for which average cost is equal to marginal cost, and explain the significance of this value. (d Find the...
A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue so $10, average total cost of $8 and fixed cost of $200. a. what is the profit?b. what is the marginal cost?c. what is its average variable cost?d. is the efficent scale of the firm more than, less than, or equal to 100 units?
True or False: A profit maximizing monopolist will choose to produce a level of output where demand is inelastic.
If a competitive firm's marginal costs always increase with output, then at the profit maximizing output level, producer surplus is Select one: a. zero because marginal costs equal marginal revenue. b. zero because price equals marginal costs. c. positive because price exceeds average variable costs. d. positive because price exceeds average total costs. e. positive because revenues are increasing faster than variable costs