1. If P = Q/15 represents market supply for a competitive industry and market de
ID: 1090860 • Letter: 1
Question
1. If P = Q/15 represents market supply for a competitive industry and market demand is given by Qd = 500 - 10P, the equilibrium price is: a $12.50.
b$20.00.
c$31.25.
d$50.00.
2. The profit-maximizing condition for a perfectly competitive firm is:
P = AVC.
In 2009 the electronics retailer Circuit City closed its stores. If we assume this was a short-run decision, the most likely explanation for it is that the price of a typical product sold at Circuit City stores was:
If marginal cost exceeds average total cost:
MR = P. MR = AVC. P = MC.P = AVC.
In 2009 the electronics retailer Circuit City closed its stores. If we assume this was a short-run decision, the most likely explanation for it is that the price of a typical product sold at Circuit City stores was:
greater than the average total cost of producing its typical product. equal to the average total cost of producing its typical product. less than the average total cost of producing its typical product but greater than the average variable cost. less than the average variable cost of producing its typical product.Explanation / Answer
c $31.25
MR = AVC.
less than the average variable cost of producing its typical product.
average total cost decreases as output increases.
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