MBAC6010-practice questions-031008

MBAC6010-practice questions-031008 - MBAC6010: Managerial...

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112 MBAC6010: Managerial Economics Practice Questions 03/10/08 1. Which of the following conditions describe a perfectly competitive market? Many barriers to entry Firms are price takers The number of firms is large Firms’ products are differentiated There is complete information Firms are profit maximizers 2. Graph marginal costs from the table below and answer the following questions: Output Marginal costs 1 15 2 12 3 20 4 27 5 34 6 40 7 47
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MBAC6010: Managerial Economics 03/10/08 a. The firm can sell a helmet for $34 and the firm is producing 6 helmets. Is it maximizing profit? Why or why not? b. The firm can sell a helmet for $34 and the firm is producing 4 helmets. Is it maximizing profit? Why or why not? c. The firm can sell a helmet for $34. What is the profit-maximizing level of output? 3. The following graph shows cost curves for a perfectly competitive firm. a. If price is $13, what is the profit maximizing level of output? b.
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MBAC6010-practice questions-031008 - MBAC6010: Managerial...

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