MC ATC MR: 10 20 30 40 50 Output per day 34. Refer to the graph above. If the fi
ID: 1119534 • 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). d). 4 . This is where MR = MC, which is the profit maxmizing level
35). b) May always be able to make positive economic profits. This is because these firms are strong enough to prevent any entry in market, thereby keeping price levels high.
36). c). Minimum average cost, but greater or less than marginal cost. This is because in the long run, the firm will make no profit no loss.
37). c). Firm entering the market will shift the market supply curve to the right, but the firm's individual demand curves will reduce due to increased competition and reduced market share.
38). c). baseball team paying two player different salaries is price discrimation. Other situations are in accordance to market ethics, while the difference in wages even when productivities are same is sure case of price discrimination
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