19-24 efer to Table 14-3. At which quantity of output is marginal revenue equal
ID: 1126955 • Letter: 1
Question
19-24
efer to Table 14-3. At which quantity of output is marginal revenue equal to marginal cost? a. 3 b. 6 c. 8 d. 9 14. R 15. Refer to Table 14-3. The maximum profit available to this firm is a. $2 b. $3 c. $4 d. $5 16. Refer to Table 14-3. If the firm finds that its marginal cost is $11, it should increase production to maximize profit. b. a. increase the price of the product to maximize profit. advertise to attract additional buyers to maximize profit. c. d. reduce production to increase profit. One of the defining characteristics of a perfectly competitive market is a. a small number of sellers. b. a large number of buyers and a small number of sellers. c. a standardized product. d. significant advertising by firms to promote their products. 17. Which of the following statements best reflects a price-taking firm? a. If the firm were to charge more than the going price, it would sell none of its goods. b. The firm has an incentive to charge less than the market price to earn higher revenue. c. The firm can sell only a limited amount of output at the market price before the market price will fall. d. Price-taking firms maximize profits by charging a price above marginal cost. 18. Table 14-1 Price 13 Quantity 13 13 13 13 13 13 13 4Explanation / Answer
19) C. Competitive Market
As in a competitive market, a firm can sell any quantity of output at current price. The quantity sold by the firm won't affect the price set by Industry
20) D. Average Revenue is equal to the price over the whole range of output
As the table represents competitive market, in perfect comprtion Price = Marginal Revenue = Average Revenue in in the whole range of output.
21) D. None, marginal revenue is constant, over the whole range of output
As, Marginal revenue is equal to price in perfect competition in whole range of output, MR will remain constant, as price is constant.
22) B. Increase by exactly $39
Increase in (6-3)=3 unit output will increase the revenue by (13*3) = $39
23) A. equal to Marginal Revenue
In a perfect competion the price of goog is always equal to Marginal Revenue. Here, output variation is independent of price.
24) Firms have difficulty entering the market.
In perfect competition, firms can easily enter and exit the market
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