1.If the firm is producing at a quantity of output where marginal cost exceeds marginal revenue, then ________. (there can be multiple answers.)

A)the firm should reduce production

B)each marginal unit adds profit by bringing in more revenue than its cost

C)the firm's perceived demand will shift to the left

D)the excess profit would attract additional competition

2.In what way(s) is a monopolistically competitive firm inefficient?(there can be multiple answers.)

A) It does not produce at the minimum of its average cost curve.

B) It charges a price higher than marginal cost.

C) It produces where marginal revenue is equal to marginal cost.

3.Within a monopolistically competitive industry, it would be expected that: (there can be multiple answers.)

A)firms make a positive or negative economic profit in the short-run.

B)in the short-run, an innovative firm’s price is greater than their average cost.

C)firs make a positive economic profit in the long-run.

D)in the long-run, a typical firm’s price is greater than their average cost.

A monopolistic firm is currently producing 3,500 units of output; price is $100, marginal revenue is $7, average total cost is $5.50, marginal cost is $4.50, and average variable cost is $3.75. The firm should

a. raise price because the firm is losing money.

b. keep the price the same because the firm is producing at minimum average variable cost.

c. raise price because the last unit of output decreased profit by $5.50.

d. lower price because the next unit of output increases profit by $2.50.

A firm with market power is producing a level of output at which price is $60, marginal revenue is $45, average variable cost is $50, and marginal cost is $57. In order to maximize profit, the firm should

a. decrease price.

b. increase price.

c. keep price the same.

d. increase output.

e. shut down.

A company has the following data:

• Revenue (Price x Quantity) = $750,000

• Variable cost per unit = $65

• Units sold (Quantity) = 5,000

• Total costs = $625,000

• The company has no semi-variable costs

The company will open a new branch that will increase its fixed costs by $125,000.

Determine the following:

a) Price of each unit.

b) Total variable cost.

c) Total fixed costs before the new branch.

d) Total fixed costs after the new branch.

e) Total costs after the new branch. f) Breakeven quantity after the new branch.

90) The difference between a perfectly competitive firm's total revenue and its total cost is

A) always zero.

B) greatest at the profit-maximizing level of output.

C) always positive.

D) always negative.

91) Currently kidneys are allocated based on the needs of each perspective recipient, their blood type, and the urgency of their case. An alternative way to allocate kidneys is to go by the order in which patients were placed on the waiting list. In that case, the allocation of resources is made using

A) personal characteristics.

B) market price.

C) auction.

D) first-come, first-served

93) Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The ________ of a football is ________.

A) relative price; 1/2 basketball per football

B) relative price; 2 basketballs per football

C) opportunity cost; $20.00

D) opportunity cost; $10.00

94) The supply curve for CDs shows the

A) maximum price that consumers are willing to pay if a given quantity of CDs is available.

B) maximum price that producers must be offered to get them to produce a given quantity of CDs.

C) minimum price that producers must be offered to get them to produce a given quantity of CDs.

D) minimum price that consumers are willing to pay if a given quantity of CDs is available.

What does it mean for its shareholders when a company is applying most of its revenue to the repayment of loans?

a. If the marginal revenue is less than the marginal cost, what should a profit-maximizing company do?

b. In a perfectly competitive graph, how does one calculate the economic profit?

c. What is the shutdown point in a perfectly competitive firm? '

d. Briefly, what is the difference between economies of scale and diseconomies of scale? Why is it important to the firm?

e. Given the following total cost function TC(q) = 1000 + 13q. Find the fixed cost, variable cost, average total cost, and the marginal cost. How do you know that these costs are in the short-run? Explain.

A perfectly competitive firm has a total revenue function of TR = 90Q and cost function of TC = 30Q2 + 50.

i. Determine the price the firm should charge and the quantity of output that it should produce to maximize profit.

ii. if there are 20 identical firms in the market, what will be the perfectly competitive price and total output produced?

In the current year, the Best Corporation had sales revenue of $380,000, operating expenses of $390,000, and charitable contributions totaling $9,000. In addition, the company received a $50,000 cash dividend from another domestic corporation, a company in which it held a 15 percent ownership interest. What is Best Corporation’s taxable income?

The following table represents short run cost-revenue information (in dollars) for a firm in a competitive market.

(a) Fill in all the blanks above using the following information: The Market Price is $500 per unit of output, the Average Variable Cost of producing 9 units of output is $800, and the Average Total Cost of producing 10 units of output is $860

(b) Where does diminishing returns start? Explain your answer.

(c) What is the Fixed Costs for this firm? Explain your answer.

(d) In the Short Run, if this firm would go into production, determine the profit maximizing (or loss minimizing) level of output and profit amount.

(e) In the Short Run, if this firm would instead shutdown without going into production, determine its production amount and profit amount.

(f) Please determine the best course of action for this firm in the Short Run.

(g) Based on the data above, in the Long Run, explain what this firm should do.

Given the demand curve for a monopolist: Qd= 60 -2 P and the marginal revenue curve: MR = 30 -Q. Marginal cost equals average cost at $14. What is the price and quantity that the profit-maximizing monopolist will produce? Graph these curves andlabel theequilibrium points.

b) Ifthis were a competitive industry, what price and quantity would be produced? Show this on the above graphand show your work (answers) below.

c) What is the monopolist's profit? What is the consumer surplus at the monopolist's price? The dead weight loss to society? Write your formulas as well as the answers.Show these areas on the graph above or draw a new one below(remember -neatness counts).