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Homework6_soln - Economics1A ProfScottCarrell...

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Economics 1A Prof Scott Carrell Homework 6 (Due in class Feb 27th) I. Multiple Choice Questions (For each of the following questions, choose the best answer and explain clearly why you chose that answer over the other choices) 1. Suppose a monopolistically competitive firm is producing 2000 units of output and has total revenues of $200,000. If this is a long run equilibrium, then it must be the case that a) marginal cost is $50 b) minimum average total cost is $50 c) total cost is $200,000 d) None of the above 2. Suppose a perfectly competitive firm is producing 1000 units of output and has total revenues of $100,000. If this is a long run equilibrium, then it must be the case that 3) The figure above shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between Los Angeles and Toronto. If the airline is regulated, marginal cost pricing implies that ____ flights will be offered each month at a price of ____ per flight.
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