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tt - Quiz 4 Sample Questions 1 a b c d Total revenue will...

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S P Q D 10 10 2 6 4 Quiz 4 Sample Questions 1. Total revenue will increase if price a. falls and demand is inelastic. b. falls and demand is elastic. c. rises and demand is elastic. d. rises and demand is unitary elastic. 2. According to the accompanying diagram, in market equilibrium consumer surplus is 3. A monopolist maximizes profit by setting 4. Suppose that last year you produced 500 million units at an AC of $2 and this year you are producing 600 million units at an AC of $1.80. Your firm is experiencing 5. Average fixed cost in the short run a. increase as the quantity produced increases. b. decrease as the quantity produced increases. c. are equal to zero as they do not matter for profit maximization. d. none of the above.
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2 S P Q D 10 10 2 6 4 Answers: 1. Total revenue will increase if price 2. According to the accompanying diagram, in market equilibrium consumer surplus is 3. A monopolist maximizes profit by setting 4. Suppose that last year you produced 500 million units at an AC of $2 and this year you are producing 600 million units at an AC of $1.80. Your firm is experiencing a. increasing returns to scale. b. decreasing returns to scale. c. constant returns to scale. d. diminishing returns to scale. 5. Average fixed cost in the short run
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3 Questions: 1. Graphically, consumer’s surplus is measured by
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