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fin02w - Econ 1 Final Examination Fall Quarter 2002 1 A...

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Econ 1 Final Examination Fall Quarter 2002 1. A price-taking firm finds that MC = MR when 3,000 units are produced. The firm’s fixed costs are $4,000. When 3,000 units are produced, the firm’s variable costs are $5,000. If the product sells at a price of $2, then we predict that the firm would: a) Produce more than 3,000 units and earn a profit b) Shut down and lose $9,000 c) Shut down and lose $4,000 d) Produce 3,000 units for a loss of $3,000 e) Produce 3,000 units for a loss of $2,000 2. Under perfect competition, which of the following is true? 3. Which of the following is a correct explanation about a monopolistic firm? 4. Suppose there are two types of consumers with different elasticities of demand for a good produced by a monopolistic firm. Which of the following situations would you likely expect?
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