Question

In: Economics

1. In the long-run a perfectly competitive firm should exit from the market. a. True b....

1. In the long-run a perfectly competitive firm should exit from the market.

a. True b. False

2. A perfectly competitive firm is earning an economic profit when

a.P>ATC

b.P =ATC

c.MR= MC

d. MR>MC

3.A firm operating in a perfect market maximizes its profit by adjusting

a. its output price until it exceeds average total cost as much as possible.

b. its output price until it exceeds marginal cost as much as possible.

c. its output until its marginal cost equals output price.

d. its output until its average total cost is minimized.

4. Total product is maximum when the marginal product becomes zero

a. True

b. False

5. If you know that with 8 units of output, average fixed cost is Taka12.50 and average variable cost is Taka 81.25, then total cost at this output level is:

a.Taka 93.75

b.Taka 97.78

c.Taka 750

d.Taka 880

Expert Solution

Answer:1 The statment is false

In long run competitive firm exit only when were they running economic losses in the short run.

Answer2 : Option (a) is correct

A perfectly competitive firm is earning an economic profit when A>ATC.

If we have A>ATC, There are profit opportunity Hence option (a) is correct.

Profit in the long run differs from profit in the short run:

Short run:
P > ATC = operating at a profit

Long Run:
P > ATC = Profit/Operating

Answer3 : option (c) is correct

A firm operating in a perfect market maximizes its profit by adjusting its output until its marginal cost equals output price.

Answer:4 The statment is TRUE.

Short run production process , if marginal product is zero, then total product is at a maximum.

Answer5 : option (c) is correct

If you know that with 8 units of output, average fixed cost is Taka12.50 and average variable cost is Taka 81.25, then total cost at this output level is Taka 750

Kindly UPVOTE please

Rahul Sunny answered 1 year ago

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