FINAL EXAM practice Qs

FINAL EXAM practice Qs - 6 Suppose that in a perfectly...

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6) Suppose that in a perfectly competitive industry, the market price of the product is $12. Firm A is producing the output level at which average total cost equals marginal cost, both of which are $10. To maximize its profits, firm A should A) increase its advertising. B) reduce output. C) change the price of the product. D) expand output. E) leave output unchanged. D Assume the following total cost schedule for a perfectly competitive firm. Output TVC TFC 0 0 100 1 40 100 2 70 100 3 120 100 4 180 100 5 250 100 6 330 100 TABLE 1 8) If the market price were $71, the competitive firm depicted in Table 1 would produce A) 6 units of output. B) would not produce because P < minimum of ATC . C) 2 units of output. D) would not produce because P < TFC . E) 5 units of output. E 2) Under perfect competition, the demand curve facing a firm is typically A) upward sloping. B) the same as the industy's demand curve. C) a rectangular hyperbola.
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This note was uploaded on 11/08/2011 for the course ECON 1B03 taught by Professor Hannahholmes during the Fall '08 term at McMaster University.

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FINAL EXAM practice Qs - 6 Suppose that in a perfectly...

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