Week 5 quiz

Week 5 quiz - will: Fail to maximize profit and resources...

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Week 5 quiz 1.  In which of the following industry structures is the entry of new firms the most difficult? B. Oligopoly 2. In the short run the individual competitive firm’s supply curve is that segment of the: B. Marginal cost curve lying above the average variable cost curve 3. In answering the next question, assume a graph in which dollars are measured on the  vertical axis and output on the horizontal axis. Refer to the above information.  For a purely competitive firm, total revenue A. Graphs as a straight, upsloping line  4. Marginal revenue: Change in total revenue associated with the sale of one or more unit of output 5. If production is occurring where marginal cost exceeds price, the purely competitive firm 
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Unformatted text preview: will: Fail to maximize profit and resources will be overallocated to the product 6. A purely competitive firm is precluded from making economic profit in the long run because: Of unimpeded entry to the industry 7. In the short run a purely competitive firm that seeks to maximize profit will produce: Where total revenue exceeds total cost by the maximum amount 8. Suppose you find that the price of your product is less than minimum AVC. You should: Close down because, by producing, your losses will exceed your total fixed costs 9. Suppose losses cause industry X to contract and, as a result, the prices of relevant inputs decline. Industry X is: An increasing-cost industry...
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