Question

Short-run production decision of a firm in any type of market structure is to produce at the output level where marginalis__________ is equal to marginal __________________

The costs, which reflect the value of the resources used even if no direct payments are made, are called___________costs, whereas the costs, which reflect the direct payments made for the use of resources in a production process, are called___________________________

According to short-run rules of profit-maximization for a purely competitive firm, if P > MC, then should its output, whereas if P < MC it should its output.

When building the larger size plant results in the reductions in the minimum average costs of production, then________of scale occur, and when an increase in plant size results in reduction in its operation efficiency, then_____________________of scale occur

If the income elasticity of demand for a particular good is negative, then such good is known to be an________good, and if the income elasticity of demand for the good

is positive, then it is known to be a__________good.

When the government increases taxes this does not affect firm's marginal costs and thus, its profit-maximizing output rate does not change, but if taxes are raised, this will increase the firm's marginal costs and reduce its profit-maximizing rate of output.

Kinked demand curve is faced by the firms operating in the             industry, whereas ___________              firm faces downward sloping individual demand curve that is identical to the market demand curve

A group of firms with the explicit formal agreements to fix prices and their output shares in a given market is called___________, whereas the markrt, which is a subject to a potential entry if prices or profits increase, is called______________market

Positive cross-price elasticity of demand coefficient indicates that the two related goods are ________________whereas negative cross-price elasticity of demand coefficient means that the two related goods are

A period of time that is extended enough for all inputs to be verified, i.e. during which there are no fixed costs faced by the firm is called ______________, and the period, during which quantity of some inputs cannot be changed is called _________________

Answer 1

Short-run production decision of a firm in any type of market structure is to produce at the output level where marginal revenue is equal to marginal cost.

The costs, which reflect the value of the resources used even if no direct payments are made, are called Implicit cost.whereas the costs, which reflect the direct payments made for the use of resources in a production process, are called Explicit cost.

When building the larger size plant results in the reductions in the minimum average costs of production, then economies of scale occur, and when an increase in plant size results in reduction in its operation efficiency, then dis economies of scale occur.

If the income elasticity of demand for a particular good is negative, then such good is known to be an inferior good, and if the income elasticity of demand for the good is positive, then it is known to be a normal good.

Kinked demand curve is faced by the firms operating in the Oligopoly industry, whereas monopoly firm faces downward sloping individual demand curve that is identical to the market demand curve.

A group of firms with the explicit formal agreements to fix prices and their output shares in a given market is called Cartel , whereas the market, which is a subject to a potential entry if prices or profits increase, is called Contestable market.

Positive cross-price elasticity of demand coefficient indicates that the two related goods are substitutes whereas negative cross-price elasticity of demand coefficient means that the two related goods are Complementary goods.

A period of time that is extended enough for all inputs to be verified, i.e. during which there are no fixed costs faced by the firm is called long run, and the period, during which quantity of some inputs cannot be changed is called short run period.