QUESTION 13 1 points Saved Assume that a producing one more computer will case t

Question

QUESTION 13 1 points Saved Assume that a producing one more computer will case this firm s t computer company operates in a perfectly competitive market producig 5,000 computers per day. A this output eve, price exceeds this frm s marginal cost. It tollows hat total cost to decrease O profits to increase. profits to decrease. O profits to remain unchanged. QUESTION 14 1 points The minimum efficient scale of a plant is one that O avoids diminishing returns O minimizes long run average costs creates diseconomies of.cale allows fim to ean a normal rate of retum 1 points QUESTION 15 Marginal cost imersects average variable cost: when average variable cost is increasing when average variable cost is decrensing al the lowest point of MC O al the lowest poist of AVc None of the above; they do n er

Explanation / Answer

Q13
Answer
Option Profit to increase
The profit is maximum at MC=P
the P is horizontal and MC is increasing so if the P>MC means Quantity is smaller than the profit-maximizing level so if the output increases the profit will increase.
Q14

Answer
Option
minimizes long-run average cost
the minimum efficient scale is to produce at the minimum average total cost in long run.
Q15
Answer
Option
at the lowest point of AVC
the MC is the additional cost of a unit and that is added to variable cost so both intersect at MC=min(AVC)

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