When a firm has drts the lrac increases and the

When a firm has DRTS, the LRAC increases, and the output also increases by a smaller percentage. True /F
3. cost relationships at a specific quantity; focus on TC, TFC, TVC, ATC, AFC, AVC, and MC
A firm is producing 20 units of output. At this output, the firm’s average total cost is $470 and its total fixed
cost is $2,000. What is the firm’s total variable cost at this output?

22. (16 points) Given a monopoly’s inverse demand function and total cost function, find profit
maximizing output, the price charged by monopoly, calculate total profit, and calculate the price
The elasticity of demand.
4.
production functions and their characteristics
With a linear production function, it’s not possible for a firm’s output to be produced with the use of only 1 input. T/F
A firm’s production function is as follows: Q = min {14K, 17L}, where K and L are both measured in hours. The firm
currently uses 11 hours of labor and 13 hours of the capital. How will the firm’s output change if its labor usage is 12
hours?

5.
appen next
Profit will go to 0
Competitors will enter the industry
Price decrease
Firm’s output decrease
22. (16 points) Given a monopoly’s inverse demand function and total cost function, find profit
maximizing output, the price charged by monopoly, calculate total profit, and calculate the price
The elasticity of demand.