reduce revenues will rise by more than costs from producing less output

Reduce revenues will rise by more than costs from

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reduce; revenues will rise by more than costs from producing less output, increasing the firm's profit Incorrect reduce; total revenues exceed total costs Incorrect expand; revenues will rise by more than costs from selling additional units of output, increasing the firm's profit ( True Answer )Correct leave output unchanged; selling additional units of output will cause marginal revenue to increase by a smaller amount than marginal cost Incorrect 452 To maximize profits, a firm should produce where: MR = MC . ( True Answer )Correct TR/Q = TC/Q . Incorrect P = AVC . Incorrect ATC < P < AVC . Incorrect 45 3 Figure 8.2
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Reference: Ref 8-4 (Figure 8.2) The total revenue curve for a perfectly competitive firm is represented by curve: A. Incorrect B . ( True Answer )Correct C . Incorrect D . Incorrect 454 Which of the following statements is TRUE of price-taker firms? I. ? TR/ ? Q = P = MR II. Price takers must lower their price to sell additional units of output because demand curves slope downward. III. If a price taker decides to increase output, the market price will decrease. IV. Examples of price takers include McDonald's, Burger King, Wendy's, and SONIC Drive-in. II and III Incorrect I, II, III, and IV Incorrect I only ( True Answer )Correct II and IV Incorrect 455 Figure 8.3 Reference: Ref 8-5
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(Figure 8.3) The graph depicts the market for walnuts?a perfectly competitive market. Which of the following statements is TRUE? I. The demand curve facing a walnut grower is perfectly elastic at $1.00. II. If a walnut grower sold 80,000 pounds of walnuts, his total revenue would equal $138,400. III. If a walnut grower sold one more pound of walnuts, his total revenue would increase by $1.73. I, II, and III Incorrect II only Incorrect II and III ( True Answer )Correct I only Incorrect 45 6 Figure 8.4 Reference: Ref 8-6 (Figure 8.4) In a perfectly competitive market with 5,000 firms, the equilibrium price and quantity are $0.70 and 3.0 million units. The demand curve facing a firm in this market is represented by: panel (a). Incorrect panel (b). Incorrect panel (c). ( True Answer )Correct
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