Ch11_12_part2_Practice_Problems

In a perfectly competitive market the process of

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Unformatted text preview: fer to Figure 1. When price rises from P2 to P3, the firm finds that a. marginal cost exceeds marginal revenue at a production level of Q2. b. if it produces at output level Q3 it will earn a positive profit. c. expanding output to Q4 would leave the firm with losses. d. it could increase profits by lowering output from Q3 to Q2. 42. Refer to Figure 1. When price falls from P3 to P1, the firm finds that it a. decreases its fixed costs. b. should produce Q1 units of output. c. should produce Q3 units of output. d. should shut down immediately. 43. Refer to Figure 14- 4. When price rises from P3 to P4, the firm finds that a. fixed costs decrease as output increases from Q3 to Q4. b. it can earn a positive profit...
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This document was uploaded on 04/06/2014 for the course ECON 1 at UCLA.

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