13/ In the prior problem, should the firm change Q?

Group of answer choices

It should increase Q because MR > MC

It should increase Q because MR > ATC

It should decrease Q because MC < ATC

It should decrease Q because MR > MC

It should keep Q the same because it is earning a profit.

14/ Suppose a perfectly competitive firm is producing 100 units, and that MR=MC=$20. If the firm has a loss of $50, should it raise price?

Group of answer choices

No

Yes

We can't tell without more information

15/ What rule should a firm follow to make sure it maximizes profits?

Group of answer choices

Choose Q where MR = MC

Choose Q where MR = ATC

Choose Q where MC = ACT

Choose P as far above ATC as possible

Choose P so that MR is above ATC

16/ What do we know about the elasticity of demand for a perfectly competitive firm?

Group of answer choices

It will be perfectly elastic

It will be perfectly inelastic

It will be elastic

It will be inelastic

We can't tell without more information

17/ Profit per unit is equal to...

Group of answer choices

P - ATC

P - MC

MR - min ATC

P - min ATC

MR - MC

18/ Suppose a competitive firm has MR = $10 and MC = $10. What does this tell us about the firm's profits?

Group of answer choices

Nothing

The firm could earn more profit if it expanded Q

The firm is earning a profit

The firm is losing money

19/ Suppose a perfectly competitive firm is producing a quantity of output where P = ATC. Which of the following is true?

Group of answer choices

Profit = 0, but we don't know if the firm should raise or lower Q

The firm should lower price

The firm should raise price

The firm should increase Q

The firm should reduce Q

20/ Suppose a perfectly competitive firm has the costs in the table below.

Q	TC	FC	VC	MC	ATC
0	10	10	0	XX	XX
1	20	10	10
2	25
3	40
4	65

If the price of the product is $20, what Q should the firm produce?

Group of answer choices

Produce 3 units

Produce 1 unit

Produce 2 units

Produce 4 units

21/ In the prior question, how much profit is the firm earning?

Group of answer choices

$20

$15

$0

-$5

$30

22/ What rule should a firm follow to make the most profit possible?

Group of answer choices

If MR>MC, continue to increase Q until MR = MC

If MR < ATC, continue to increase Q until MR = ATC

Choose Q where P > ATC

Choose Q where P = ATC

23/ What was the main point of the farming game that we played in class?

Group of answer choices

Economic profit = 0 in the long run if there is free entry

Farmers usually earn a profit if they pick the right crop

Farmers earn zero profit in the short run and the long run

Farmers usually earn a positive profit in the short run

Choose Q where MC < ATC

24/ In the farming game we played in class, what happened when farmers got paid $2 not to produce anything?

Group of answer choices

The accounting profit of the crops rose to $2, but the economic profit was $0

Farmers all stopped growing any crops

The accounting profit of producing crops fell to -$2

The price of crops fell by $2 to offset the payment.

25/ What are increasing returns to scale?

Group of answer choices

If a firm's average costs fall as the firm gets larger

An industry with only a few large firms

A situation where MC > ATC

If a firm produces at a point where P = ATC