Question

Question 31 2.5 pts 31. A firm in a perfectly competitive industry has total revenue of $200,000 per year when producing 1,000 units of output per year. In this case its average revenue is $200 and its marginal revenue is __ zero. also $200 less than $200. O greater than $200 Question 32 2.5 pts 32. In a perfectly competitive industry, the market price of the product is $12.Firm A is producing the output at which average total cost equals marginal cost, both of which are $10. To maximize profits, Firm A should increase its selling price. increase output decrease output but not shut down. O maintain its current rate of output. shut down

Answer 1

31) option 2)

In perfect Competition, P = MR

So P = 200,000/1000

= 200

32) option 2)

Increase output

As P > MC

33) option 4)

All are true

Bcoz in perfect Competition, each Firm earns zero profit at profit Maximization

So TR = TC, & P = MC

Hence elasticity of demand = 1

34) option 3) ,π= 800

π= (P-ATC)*Q

= (20-12)*100

= 800

35) option 1) Increase output

As P > MC

So produce more