MC ATC MR: 10 20 30 40 50 Output per day 34. Refer to the graph above. If the fi
ID: 1119443 • Letter: M
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MC ATC MR: 10 20 30 40 50 Output per day 34. Refer to the graph above. If the firm maximizes profit, the marginal cost of its product will be: a stae a $i0 c. $6. 35. In the long run an oligopoly: a. Will produce less than a monopoly b. May be able to earn positive economic profits c. Will always produce in the range of decreasing returns to scale d. Will produce on the portion of the demand curve where demand is price-inelastic 36. When a perfectly competitive firm is in long-run equilibrium, price is equal to: a. Marginal cost, but may be greater or less than average cost b. Minimum average cost, and also to marginal cost c. Minimum average cost, but may be greater or less than marginal cost d. Marginal revenue, but may be greater or less than both average and marginal cost 37. If firms enter a perfectly competitive industry, then in the long run this change will shift the industry a. Demand curve to the left, and the individual firm demand curves will shift down b. Demand curve to the right, and the individual firm demand curves will shift up c. Supply curve to the right, and the individual firm demand curves will shift down d. Supply curve to the left, and the individual firm demand curves will shift up 38. Which case below best represents a case of price discrimination? a. An insurance company offers discounts to safe drivers b. A major airline sells tickets to senior citizens at lower prices than to other passengers c. A professional baseball team pays two players with identical batting averages different salaries d. A utility company charges less for electricity used during "off-peak" hours, when it does not have to op its less-efficient generating plantsExplanation / Answer
34) If the firm maximizes the profit the marginal cost of the product will be $4. Because then the company will be producing at the point where its marginal cost and marginal revenue meet.
35) In the long run, the oligopoly will produce at a point where its demand curve is price inelastic. Oligopoly has a kinked demand curve and produces at a point where if he reduces the price the other follow immediately but no one follows if he increases the price. Correct answer "D".
36) IN the long run, the perfectly competitive industry produces at a point where its Average cost is minimum and also to marginal cost. There is no profit or loss faced by the company in the long run. The correct answer is "B".
37) The correct answer is "C". If the firm enters a perfectly competitive market his prices come down in the long run and they can only break even. So the company will be selling more (downshift in demand curve) and at a lower price(shift the supply curve to the right ).
38) The correct answer is "C". A team management is paying two different salaries to two different players with same batting averages.
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