8) Refer to Table 12-1.Suppose the fixed cost of production rises by $500 and the price per unit is still $8. What happens to the firm's profit-maximizing output level? A) It must fall. B) It must rise to offset the increased cost. C) It will remain the same.D) The firm will shut down.Answer: C 9) Refer to Table 12-1.The firm will not produce in the short run if the output price falls below Figure 12-1
10) Refer to Figure 12-1.If the firm is producing 700 units 11) Refer to Figure 12-1.If the firm is producing 700 units, what is the amount of its profit or loss? 12) Refer to Figure 12-1.If the firm is producing 200 units A) it breaks even.B) it is making a loss.C) it should cut back its output to maximize profit.D) it should increase its output to maximize profit.Answer: D 14) Refer to Figure 12-3.If the firm is producing 500 units, what is the amount of its profit or loss? 18) If, for a perfectly competitive firm, price exceeds the marginal cost of production, the firm should Figure 12-2
19) Refer to Figure 12-2.What is the amount of profit if the firm produces Q2units? 20) Refer to Figure 12-2.Suppose the firm is currently producing Q2units. What happens if it expands output to Q3units? A) Its profit increases by the size of the vertical distance df.B) It makes less profit.C) It incurs a loss.D) It will be moving toward its profit maximizing output. Answer: B12.3 Illustrating Profit or Loss on the Cost Curve Graph1) A firm's total profit can be calculated as all of the following except
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