16. Total profit for a firm is calculated as a. (price minus average cost) times quantity...

16. Total profit for a firm is calculated as

a.	(price minus average cost) times quantity of output.
b.	total revenue minus total cost.
c.	Both a and b.
d.	None of the above.

17. In the short run, if the price is less than average variable cost, a firm operating in a competitive market will

a.	shutdown.
b.	exit.
c.	increase the price.
d.	increase the quantity.

18. When a restaurant stays open for lunch service even though few customers patronize the restaurant for lunch, which of the following principles is (are) best demonstrated?

(i)			Fixed costs are sunk in the short run.
(ii)			In the short run, only variable costs are important to the decision to stay open for lunch.
(iii)			If revenue exceeds variable cost, the restaurant owner is making a smart decision to remain open for lunch.
	a.	(i) and (ii) only
	b.	(ii) and (iii) only
	c.	(i) and (iii) only
	d.	(i), (ii), and (iii)

19. In the long run, a firm will enter a competitive industry if

a.	total revenue exceeds total cost.
b.	the price exceeds average variable cost.
c.	the firm can earn accounting profits.
d.	All of the above are correct.

20. Which of the following statements is not correct?

a.	Both a competitive firm and a monopolist maximize profits at an output where marginal cost equals marginal revenue.
b.	Both a competitive firm and a monopolist use discriminatory pricing.
c.	A competitive firm is a price taker.
d.	A monopolist is a price maker.

Expert Solution

16. Option b
Profit is the measurement of difference between total revenue and total cost

17. Option a
If the price is less than average variable cost, it would not be able to cover the variable expenses

18. Option d
As fixed costs are not recoverable in short run and if variable costs are recovered in short run, it would be better to operate the business

19. Option d
Because of positive profit, many new firms would enter the market

20. Option b
Monopolist would involve in discriminatory pricing

Rahul Sunny answered 3 years ago

The quantity demanded is 12 minus price, and the quantity supplies equals three times the price....

The quantity demanded is 12 minus price, and the quantity supplies equals three times the price. How much consumer surplus and producer surplus is there at equlibrium? What if the government were to impose an excise tax of four follars per unit? What would be the tax revenue and how large would the deadweight loss be?

Quantity Total Cost Total Fixed Cost Total Variable Cost Average Fixed Cost Average Total Cost Average...

Quantity Total Cost Total Fixed Cost Total Variable Cost Average Fixed Cost Average Total Cost Average Variable Cost Marginal Cost 0 30 1 75 2 150 3 255 4 380 5 525 6 680 7 840 8 1010 9 1200 Given the quantity and total cost, calculate for total fixed cost, total variable cost, average fixed cost, average total cost, average variable cost, and marginal cost. Excel formulas would be nice but not required.

Based on the table below, what was the profit of the firm? Quantity Total Fixed Cost...

Based on the table below, what was the profit of the firm? Quantity Total Fixed Cost $234,000 Total Variable Cost Total Cost Average Fixed Cost Average Variable Cost $62 Average Total Cost $98 Marginal Cost $177 Price $155 Marginal Revenue $79 Total Profit (loss)

For a monopoly, profit per unit of output is? A-marginal revenue minus marginal cost B-price minus...

For a monopoly, profit per unit of output is? A-marginal revenue minus marginal cost B-price minus average total cost C-average total cost minus marginal revenue D-price minus marginal revenue E-total revenue minus total cost

demand p=20-q total cost =20+q+q^2 find price ,quantity, and profit for a monoplist firm price ,quntitiy,...

demand p=20-q total cost =20+q+q^2 find price ,quantity, and profit for a monoplist firm price ,quntitiy, and profit for purely commpetitive firm

For each quantity, calculate average variable cost, average total cost, and marginal cost.

Variable TotalQuantity Cost Cost 0 cups Rs.0 Rs.29 1 9 39 2 24 54 3 44 74 4 69 99 5 99 129 6 134 164For each quantity, calculate average variable cost, average total cost, and marginal cost.Plot all three curves on the same graph. Discuss the relationship between marginal-cost curve and average-total-cost curve.

Table 15-8 The following table provides information on the price, quantity, and average total cost for...

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. Price Quantity Average Total Cost $24 0 --- $18 5 $14.00 $12 10 $11.00 $6 15 $10.67 $0 20 $11.00 Refer to Table 15-8. What is the maximum profit that the monopolist can earn? A. $20 B. $10 C. $40 D. $30

quantity of broomsticks fixed cost variable cost total cost average fixed cost average variable cost average...

quantity of broomsticks fixed cost variable cost total cost average fixed cost average variable cost average total cost marginal cost marginal product 0 10 $13 $38 22 $28 32 $70 41 $64 50 $110 59 $108 65 $133 70 $185 how do I fill in the blanks? as well as graph the three average cost curves and the marginal cost curve.

when a firm faces a market price that is between the minimums of average total cost...

when a firm faces a market price that is between the minimums of average total cost and average variable cost, which of the strategies should it choose? a. continue to produce and sell output because it will maximize its economic profit b. produce nothing and shut down the business c. produce nothing and keep the business d. continue to produce and sell output because it will minimize its economic loss

If average variable cost is greater than price, a profit maximizing firm in a perfectly competitive...

If average variable cost is greater than price, a profit maximizing firm in a perfectly competitive market should * continue to produce its current output level. shut down in the short run. increase its output level to minimize its loss. none of the above.

Question