Micro test7

Micro test7 - Exam 1)

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Exam 1 ) Describe the total revenue-total cost approach to profit maximization.   (10pts) The total revenue - total cost method relies on the fact that profit equals  revenue minus cost. To obtain the profit maximizing output quantity, we  start by recognizing that profit is equal to total revenue minus total cost. 2 ) Total revenue for producing 10 units of output is $6,. Total revenue  for producing 11 units of output is $8. Given this information, the  (10pts) marginal revenue for producing the eleventh unit is $2. 3 ) Describe in detail four characteristics of pure competition.  (10pts) (1) the presence of a large number of sellers that act independently in a  market; (2) the production and sale of a standardized or homogeneous  product; (3) the individual firms are “price takers” in the sense that the  seller must accept the going market price for the sale of output; and (4) 
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This note was uploaded on 12/01/2011 for the course ECON 1023 taught by Professor Kent during the Spring '11 term at ASU.

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Micro test7 - Exam 1)

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