3. In making a production decision, an entrepreneur a. Decides whether to enter
ID: 1119467 • Letter: 3
Question
3. In making a production decision, an entrepreneur a. Decides whether to enter or exit the market. b. Decides what level of output will maximize profits. c. Determines plants and equipment. d. Can change both fixed and variable inputs. 4. Which of the following best describes the efficiency results in oligopoly? a. P> MC and P minimum ATC b, P= MC and P > minimum ATC c, P MC and P-minimum ATC d. P> MC and P > minimum ATC MC ATC MR D E Quantity 5. to the above graph of a firm in monopolistic competition. The long-run equilibrium price and outt fo this firm will be: a. A and C b. B and D c. A and LD d. B and C 6. In the short nun, the perfestly competitive firm should reduce opt to zero and shut down it a. price falls below average variable cost b. the demand curve faced by the firm becomes horizontal. c. price falls below the marginal cost of production. d. the firm earns no positive economic profit. 7. If a monopolist increases output from 14 to 15 by lowering its price from $32 to S31, marginal revenue is b. $17 c. $448 d. $465Explanation / Answer
The correct choice for question number 3 is option B. The decision of production requires how much of inputs to be hired in order to produce a particular desirable level of output with generate profits for the entrepreneur.
The correct choice for question number 4 is option d. Oligopoly earn significant profits in the long run as well. Price is always greater than the marginal cost and because of the profits earned the prices also greater than the average total cost
The correct option for question number 5 is option C. Monopolies will produce a level of output on which is determined by the marginal revenue and marginal cost interaction. This occurs at. D. And this particular output level generator price of A
The correct option for question number 6 is option A. This is called the shutdown price and when the firm is not able to cover it's variable cost it should shut down
For question number 7 see that the total revenue changes from 448 to 465 which means marginal revenue is 17. Correct option is option B.
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