8. A firm in perfect competition should produce an additional unit of output if

Question

8. A firm in perfect competition should produce an additional unit of output if a. b. total revenue is greater than total cost MR 2 MC 9. Which of the following is true? b. If change in total economic surplus is positive due to a shift in a demand or supply curve, society is better off the law of diminishing marginal returns states that as the use of an input increases, the MPP will eventually fall c. d. all of the above. 10. Which of the following is not relevant in the long-run? a. a rising marginal cost curve b. a U-shaped average total cost curve c. fixed costs d. none of the above 11. The short run supply curve of the individual firm in a purely competitive market is: a the rising segment of the average total cost curve b. the entire segment of the average total cost curve c. the rising segment of the average variable cost curve d. the rising segment of its marginal cost curve above average variable cost curve. 12. A monopoly refers to: a. A seller of a product for which there are no substitutes b. A seller of a highly advertised product c. A seller in a market in which demand is exceptionally high d. A seller that is subsidized by the government. 13. The marginal revenue curve for a monopoly is below the demand curve because: a. The monopolist's demand curve is perfectly elastic b. The monopolist's demand curve is perfectly inelastic c. In order to sell more output, the monopolist must lower the price on all its output d. All of the above. 14. Monopoly will expand output: a. Until total revenue equals total cost b. Until marginal revenue is zero c. As long as the marginal revenue is above the marginal cost d. Until marginal cost is zero. 15. In an oligopoly market structure, there are: a. Many small sellers b. Few very large sellers c. Only one seller d. Only two sellers

Explanation / Answer

(8) (b)

If MR > MC, marginal profit is positive which can be increased by increasing output.

(9) (d)

All are correct.

(10) (c)

In long run, all costs are variable and there are no fixed costs.

(11) (d)

(12) (a)

In monopoly market there is only 1 seller, so no substitutes exist.

(13) (c)

Since demand curve is downward sloping following law of demand, MR curve lies below the demand curve, and has the same vertical intercept as, but twice as steep as, the demand curve.

(14) (c)

If MR > MC, marginal profit is positive which can be increased by increasing output.

(15) (b)

The market is dominated by few large firms.

Related Questions

Navigate

• Browse (All)
• Browse 8
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.