Question 18 Not yet answered Points out of t P Flag question (This question refe

Question

Question 18 Not yet answered Points out of t P Flag question (This question refers to the MRU video Maximizing Profit under Competition') The rearranged formula for profit that Professor Tabarrok uses to find profit on the cost diagram is: Select one: a. Profit TR TC O b. Profit (P-AC)xQ c, Profits P x(Q-AC) d, profit-n« P «Q Question 19 Not yet answered Flag question Points out of 1 (This question refers to the MRU video 'Introduction to the Competitive Firm') Profit maximization is: Select one 0 a. almost never a firm's true goal nor a good approximation. O b. seldom the true goal of firms, but a good approximation. O c. the goal of all firms all of the time O d. the goal of most firms most of the time. Question 20 Not yet answered Points out of 1 P Flag question (This question refers to the MRU video 'Maximizing Profit and the Average Cost Curve:) Which of the following is true about the MR for a competitive firm? Select one O a. MR rises as quantity increases b.MR falls and then rises as quantity increases c.MR falls as the quantity increases. O d. MR is constant and equal to the market price

Explanation / Answer

18.Profit is the difference between TR and TC.

Answer-A

19.Profit maximization is the goal of firm's most of the time. Other goals like loss minimization, advertisement etc are also related to profit maximization.

Answer-C

20.In perfect competition MR=P=AR=D.The demand curve is perfectly elastic and horizontal for a competitive firm.

Answer-D

21.When P<AC,TR<TC.Company will suffer losses.The price will not rise if the firm reduces the quantity because of the elastic demand curve.

Answer-D

22.As price rises the existing firms produce more and attracted by the profits new firm's enter the market.

Answer-C

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