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# econ302-q4b-summer09-answer%20key - Econ302 Quiz 4 June 4...

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Econ302 Quiz 4 June 4, 2009 Form B Name: 1. In order to maximize profits, a firm should produce at the output level for which a. average cost is minimized. b. marginal revenue equals marginal cost. c. marginal cost is minimized. d. price minus average cost is as large as possible. Table 1 Q P TR MR TC MC 0 \$30 \$0 --- \$15 --- 1 \$30 \$30 \$30 \$25 \$10 2 \$30 \$60 \$30 \$40 \$15 3 \$30 \$90 \$30 \$60 \$20 4 \$30 \$120 \$30 \$85 \$25 5 \$30 \$150 \$30 \$115 \$30 6 \$30 \$180 \$30 \$150 \$35 2. Refer to Table 1. That the firm is perfectly competitive is evident from its 3. Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functions given by TC = .1q 2 + 2q + 30 MC = .2q + 2 The level of profit is

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4.Consider the following statements when answering this question I. The marginal cost curve intersects the average total cost and average variable cost curves at their minimum values. II. When a firm has positive fixed costs, the output level associated with minimum average variable costs is less than the output associated with minimum average total costs.
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econ302-q4b-summer09-answer%20key - Econ302 Quiz 4 June 4...

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