Question

In: Economics

1. Given some production, the point where the profit-maximizing firm will produce is which of the...

1. Given some production, the point where the profit-maximizing firm will produce is which of the following?

A. Where marginal cost equal sales

C. Where marginal cost equals marginal revenue

D. Where marginal cost equals average variable cost

B. Where marginal revenue equals average total cost

2. A firm in a perfectly competitive market produces and sells child car seats. The sales price is $600, the total fixed cost is $3,000, and the variable cost is $300 per unit. What is the marginal revenue for the tenth seat sold?

B. $625

C. $600

D. $480

A. $590

3. Dean is a professional golf coach, giving lessons in a perfectly competitive industry. After checking his accounts, his friend Roy (an economist) advises him that he should reduce the number of lessons he gives. What has Roy observed that has led him to this recommendation?

D. The price Dean charges does not cover his average variable costs.

A. Dean’s total cost was greater than his accounting profits.

B. Dean faces an inelastic demand for golf lessons.

C. The price Dean charges does not cover his marginal costs.

4. In perfect competition, the market demand curve is _________ and the individual firm’s demand curve is _________.

D. horizontal; horizontal

B. downward sloping; horizontal

C. horizontal; downward sloping

A. downward sloping; downward sloping

Expert Solution

Rahul Sunny answered 2 years ago

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