At a profit maximizing output level a marginal

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117. At a profit-maximizing output level, a. marginal revenue minus marginal cost equals zero. b. marginal profit equals zero. c. the slope of the total profit curve is zero. E,I d. All of the above are true.
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246 Chapter 7/Output, Price, and Profit: The Importance of Marginal Analysis 118. Total profit is maximized E,A a. where the spread between total revenue and total cost is greatest. b. at that output level where marginal revenue equals average cost. c. where total revenue is at a maximum. d. at the point where all variable costs are covered. 119. If at an output of 4,000 units Sloan Company is making an economic profit and marginal profit is  $20 per unit, the firm should M,A b. increase output until marginal profit falls to zero. 120. The typical total profit graphical presentation is shown as E,R 121. A microcomputer manufacturer sells 1,000 units per month at $2,500 each. A price cut to $2,000 is  being considered. His marginal cost is constant at $1,500 per unit. To maintain profits, quantity sold  must increase to at least D,I 122. Dunston Military Academy has an annual deficit of $250,000. Its 1,000 students pay tuition of  $10,000 each per year. The economics faculty has recommended solving the problem by recruiting  additional athletes with $5,000 scholarships. Each additional athlete will cost the school $2,500  (equipment, etc.). Assuming the academy agrees, how many athletes are needed to eliminate the  deficit? a. Zero, the deficit cannot be eliminated by giving more scholarships. b. 25 c. 50 D,I d. 100 123. If at optimum output of 1,000 units, the firm is incurring average variable cost per unit of $3,  average fixed cost per unit of $1.50, and selling its output at $7 per unit, total profit is M,A b. $2,500.
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Chapter 7/Output, Price, and Profit: The Importance of Marginal Analysis 247 124. Total profit is maximized if the slope of the total profit curve is E,A
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  • Fall '98
  • Baim
  • Microeconomics, Austrian School, Neoclassical economics, Marginalism

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