12. A firm is producing at an output level where AR = MC > AC >...
12. A firm is producing at an output level where
AR = MC > AC > MR = 0
a. Is this firm maximizing profits?
b. Is this firm maximizing revenue(sales)?
c. Is it making more than normal profits?
d. Could this firm decrease average costs by increasing production?
e. Could this firm increase total revenue by increasing production?
13. Do the same for: AC = AR > MR > MC > 0
14. Also for the following: AR=MR=MC=AC (what type of situation is this most likely?)
Homework Answers
1) 1) A single-price monopolist is currently producing an output level where P-520, MR = $13,...
1) 1) A single-price monopolist is currently producing an output level where P-520, MR = $13, ATC = $15, and MC = $14. In order to maximize profits, this monopolist should A) shut down B) decrease production and increase price. C) not change his output level, because he is currently at the profit-maximizing output level. D) increase production and reduce price. E) there is insufficient information to make a recommendation 2) 2) Consider a monopolist that is able to distinguish...
Exhibit 8-7 A firm's cost and MR curves In Exhibit 8-7, if this firm is currently producing 20 units of output, this...
Exhibit 8-7 A firm's cost and MR curves In Exhibit 8-7, if this firm is currently producing 20 units of output, this firm: Group of answer choices A. is at its profit-maximizing point. B. could increase profits by increasing output. C. could increase profits by decreasing output. D. should shut down. E. should decrease price. Cost, 25 MR revenues 22 (dollars) 20 Quantity
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.
At a firm's current level of production, marginal revenue is less than marginal cost (MR<MC). A...
At a firm's current level of production, marginal revenue is less than marginal cost (MR<MC). A profit- maximizing firm will decrease prices. increase output O decrease output. shut down.
At a firm's current level of production, marginal revenue is greater than marginal cost (MR>MC).A profit-maximizing...
At a firm's current level of production, marginal revenue is greater than marginal cost (MR>MC).A profit-maximizing firm will increase prices. increase output decrease output. O shut down.
all of them Question 1 (1 point) A firm producing a positive output level, covering variable...
all of them
Question 1 (1 point) A firm producing a positive output level, covering variable costs but making a loss in the short run O may nonetheless be doing the nest it can with respect to its profits O should exit the industry O should definitely shut down O is not maximizing profits O should either expand or contract its plant size Question 2 (1 point) The perfectly competitive firm's profits can be calculated as O (MR-ATC)Q O (P-AVC-AFC)Q....
QUESTION 49 A firm is currently producing where MC=$5 and MR=$10. This firm is O profit-maximizing...
QUESTION 49 A firm is currently producing where MC=$5 and MR=$10. This firm is O profit-maximizing under-producing over-producing O no conclusion can be made QUESTION 50 A firm should increase its production when O marginal revenue rises and marginal cost stays the same O marginal cost rises and marginal revenue stays the same O both marginal cost and marginal revenue are falling both marginal cost and marginal revenue are rising
QUESTION 49 A firm is currently producing where MC-55 and MR-$10. This firm is profit-maximizing under-producing...
QUESTION 49 A firm is currently producing where MC-55 and MR-$10. This firm is profit-maximizing under-producing over-producing no conclusion can be made QUESTION 50 2 poin A firm should increase its production when marginal revenue rises and marginal cost stays the same marginal cost rises and marginal revenue stays the same both marginal cost and marginal revenue are falling both marginal cost and marginal revenue are rising Question Completion Status: If the firm produces 120 units of output with 12...
If a perfectly competitive firm is producing 2,000 units and , at the 2,000th unit, the...
If a perfectly competitive firm is producing 2,000 units and , at the 2,000th unit, the difference between marginal revenue and marginal cost (MR-MC) is zero, which of the following is true? A) The firm should exactly double production to maximize profit B) The firm should decrease production to maximize profit C)The firm is maximizing profit D)The firm should increase production to maximize profit
30. Consider the firm whose MC, AC, AVC, AFC functions are shown in the following graph. AC, AC 10 AF Output 50 100...
30. Consider the firm whose MC, AC, AVC, AFC functions are shown in the following graph. AC, AC 10 AF Output 50 100 120 If the output price is equal to $14, then the firm maximizes profits by producing? a. O units b. more than 50 but less than 100 units c. more than o but less than 50 units d. more than 100 but less than 120 units e. more than 120 units 31. Consider the firm whose MC,...
1) 1) A single-price monopolist is currently producing an output level where P-520, MR = $13, ATC = $15, and MC = $14. In order to maximize profits, this monopolist should A) shut down B) decrease production and increase price. C) not change his output level, because he is currently at the profit-maximizing output level. D) increase production and reduce price. E) there is insufficient information to make a recommendation 2) 2) Consider a monopolist that is able to distinguish...
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.
At a firm's current level of production, marginal revenue is less than marginal cost (MR<MC). A profit- maximizing firm will decrease prices. increase output O decrease output. shut down.
At a firm's current level of production, marginal revenue is greater than marginal cost (MR>MC).A profit-maximizing firm will increase prices. increase output decrease output. O shut down.
all of them
Question 1 (1 point) A firm producing a positive output level, covering variable costs but making a loss in the short run O may nonetheless be doing the nest it can with respect to its profits O should exit the industry O should definitely shut down O is not maximizing profits O should either expand or contract its plant size Question 2 (1 point) The perfectly competitive firm's profits can be calculated as O (MR-ATC)Q O (P-AVC-AFC)Q....
QUESTION 49 A firm is currently producing where MC=$5 and MR=$10. This firm is O profit-maximizing under-producing over-producing O no conclusion can be made QUESTION 50 A firm should increase its production when O marginal revenue rises and marginal cost stays the same O marginal cost rises and marginal revenue stays the same O both marginal cost and marginal revenue are falling both marginal cost and marginal revenue are rising
QUESTION 49 A firm is currently producing where MC-55 and MR-$10. This firm is profit-maximizing under-producing over-producing no conclusion can be made QUESTION 50 2 poin A firm should increase its production when marginal revenue rises and marginal cost stays the same marginal cost rises and marginal revenue stays the same both marginal cost and marginal revenue are falling both marginal cost and marginal revenue are rising Question Completion Status: If the firm produces 120 units of output with 12...
30. Consider the firm whose MC, AC, AVC, AFC functions are shown in the following graph. AC, AC 10 AF Output 50 100 120 If the output price is equal to $14, then the firm maximizes profits by producing? a. O units b. more than 50 but less than 100 units c. more than o but less than 50 units d. more than 100 but less than 120 units e. more than 120 units 31. Consider the firm whose MC,...
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