Question

Tables Charts Review Normal BUAD 632 Reading Comprehension #2 1) Perfectly competitive firms are said to be "small." Which of the following best describes this smallness? A) The individual firm must have fewer than 10 employees. B) The individual firm faces a downward-sloping demand curve. C) The individual firm has assets of less than $2 million. D) The individual firm is unable to affect market price through its output decisions. 2) Assume a perfectly competitive firm is producing a level of output at which MR <MC. What will happen as the firm moves to its profit-maximizing equilibrium? A) Marginal revenue will rise. B) Marginal revenue will fall. C) Marginal cost will rise. D) Marginal cost will fall. 3) When a firm is producing at the profit maximizing level of out put and P ATC, the firm is: A) breaking even. B) incurring an economic loss. C) caming an economic profit. D) caming a profit or incurring a loss depending on the level of total fixed costs 4) When price is greater than average variable cost but less than average total cost at the profit- maximizing level of output, a firm should A) continuc to produce the level of output at which marginal revenue equals marginal cost B) increase output to minimize its losses. C) reduce output to the level at which price equals average variable cost to minimize its losses D) shutdown to minimize its losses 5) Widgets R Us, which is a price-taking firm, is currently producing 250 units of output. The market price is $3 per unit, the marginal cost of the 250th unit is $2.75, average total cost is S3.50 per unit, and average variable cost is $2.50 per unit. What advice should you give Widgets R Us? A) Increase output to reduce losses B) Continue to produce 250 units in the short run. C) Shut down to minimize losses. D) Decrease output to 200 units. Print Layout View Sec 1 Pages:1 of 2 Words: 69 of 495 MacBook Pro

Answer 1