Question

1.Revenue and profit are the same thing.

a.True

b.False

2.In the short run for a particular market, there are 300 firms. Each firm has a marginal cost of $30 when it produces 200 units of output. $30 is above every firm's average variable cost. One point on the market supply curve is

	a.	quantity = 60,000; price = $30.
	b.	quantity = 600,000; price = $90,000.
	c.	quantity = 300; price = $30.
	d.	quantity = 100,000; price = $30.

3.Profit maximizing quantity is the level of quantity where

	a.	marginal revenue is equal to average variable cost.
	b.	price is equal to average total cost.
	c.	marginal revenue is equal to marginal cost.
	d.	marginal revenue is equal to total cost.

4.Most of the firms in today's world are perfectly competitive.

a.True

b.False

5.For firms operating in a perfectly competitive market, price must always be greater than marginal revenue.

a.True

b.False

Answer 1

Q1
False
Revenue =price *quantity=the total sales
profit =total revenue -total cost =the earning
------------
Q2
answer
option a
Q=q*number of firms =200*300=60000
P=the price provided by the market itself to the firms, so it is the same.
P=$30
--------
Q3
option c
Profit is maximum when marginal profit is zero and the marginal profit =MR-MC, so profit is maximum when MR=MC.
---------
Q4
False
rarely any firm in the world is completely perfectly competitive, to some extent the stock market is the perfectly competitive market.
-------
Q5
false
Perfectly competitive market firms have P=MR=AR because these are a price taker and the demand curve is horizontal at a price given by the market forces.

​