Question
1. A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions: TR = 10Q TC = 2 + 2Q +
1. A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions:
TR = 10Q
TC = 2 + 2Q + Q2
MC = 2 + 2Q
At the level of output maximizing profit, the above firm's level of economic profit is __________
A.$0 B. $4 C. $6 D. $8
2. Scenario 2:
Output (Q): 0 1 2 3 4 5 6
Total Cost (TC): $24 $33 $41 $48 $54 $61 $69
Refer to Scenario 2. The average fixed cost of 2 units of output is:
A.$8.00. B. $8.50. C. $12.00. D. $20.50.
3.Scenario 3:
Total Product (Q): 0 1 2 3 4 5 6
Total Cost (TC): $50 $80 $105$125 $155 $195 $250
Refer to Scenario 3. Diminishing marginal returns are incurred when output is increased from:
A.1 to 2 units of output.
B.2 to 3 units of output.
C 3 to 4 units of output.
D. 4 to 5 units of output.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started