____ 40. In perfect competition, marginal revenue always equals a. total revenue
ID: 1203394 • Letter: #
Question
____ 40. In perfect competition, marginal revenue always equals
a.
total revenue.
b.
price.
c.
average cost.
d.
marginal fixed cost.
____ 41. A perfectly competitive firm should continue to expand output until
a.
total revenue exceeds total costs.
b.
total revenue exceeds variable costs.
c.
marginal revenue equals marginal costs.
d.
average revenue equals variable costs.
____ 42. A perfectly competitive firm will always maximize profits by producing where
a.
per-unit costs are lowest.
b.
total costs and total revenue are equal.
c.
P = MC.
d.
P = AC.
____ 46. The perfectly competitive firm's short-run shutdown rule is to shut down immediately if
a.
TR < TC.
b.
TR < FC.
c.
TR < VC.
d.
TR < MC > Q.
____ 47. The difference between zero profit and zero economic profit is that
a.
economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.
b.
economists do not include opportunity cost in zero economic profit, while accountants do include opportunity cost in zero profit.
c.
economists include opportunity cost in zero profit, while accountants do not include opportunity cost in zero economic profit.
d.
economists do not include opportunity cost in zero profit, while accountants do include opportunity cost in zero economic profit.
a.
total revenue.
b.
price.
c.
average cost.
d.
marginal fixed cost.
Explanation / Answer
1. Price is always equal to marginal revenue because demand curve is horizontal , No matter how much it produces it will be sold at same price
2. Marginal reveue equals marginal cost. Because the marginal revenue is the extra amount of money earned while an extra amount of money is spend.
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