# Problem Set #3 -- Online 212 -- NEW(1).doc - Problem Set 3...

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Chapter 12 / Exercise 3
Exploring Microeconomics
Sexton
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Problem Set # 3 - Online Micro 212 Name: ____________________ Madison College – Ron Dunbar 1. (4 pts.) Please answer the questions below this table. (1) (2) (3) (4) (5) (6) (7) Outp ut (Q) Price per Unit (P) Total Reven ue (TR) Margina l Revenu e (MR) Total Cost (TC) Averag e Total Cost (ATC) Margin al Cost (MC) 0 \$15 \$11 1 14 18 2 13 24 3 12 27 4 11 35 5 10 50 6 9 78 a. The above data represents the revenues and costs of _____________________________ (a perfectly competitive firm, a firm with some monopoly power). Briefly explain how you know the answer to the previous question.__________________________________. b. How do you know this is a short-run situation? _________________________________ c. Fill in the blanks in the table above. d. How much output should this firm produce to maximize it’s profit? _____units. What price should this firm charge for its product? \$_____ per unit. This choice of output and price will lead to an economic profit = \$______. 2. (16 pts.) Multiple Choice: Please answer the following Multiple Choice questions by circling the letter corresponding to the best answer. 1. A strategic resource monopoly is said to exist when: a) one firm can produce the entire industry output at a lower average cost than can a larger number of firms. b) a single firm controls crucial inputs to the production process. c) a single seller exists as a result of patent protection. d) a single firm exists because the government owns and operates the monopoly.
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Chapter 12 / Exercise 3
Exploring Microeconomics
Sexton
Expert Verified