6. Refer to the diagram, where variable inputs of labour are being added to a constant amount of capital. Diminishing returns begin when the when the firm is hiring: A) 6 units of Labour. B) 12 units of Labour C) 11 units of Labour. D) 4 units of Labour 7. Refer to the above diagram, if the firm is hiring 8 units of labour what is the total amount of output being produced? A) 400 units of output B) 50 units of output. C) 320 units of output. D) 40 units of output. E) 6.25 units of output. 8. Comparing price elasticity of demand at P0, Q0 for the two demand curves and giving a possible explanation we can say that. A) Demand 2 is more elastic then Demand 1 because Pc there are more substitutes available for the good represented by Demand 2 B) Demand 2 is less elastic then Demand 1 because there are more substitutes available for the good represented by Demand 2 C) Demand 2 is more elastic then Demand 1 because there are more substitutes available for the good represented by Demand 1 D) Demand 1 is less elastic then Demand 2 because there are more substitutes available for the good represented by Demand 1 P0 IIIIIIIIIIIIIIII Demand 2 Demand 1 Q0 anti 9. A firm in a perfectly competitive industry is Qu ty producing where short run marginal cost is greater than price. Total revenue is $3000; short run total cost is $3050 and total fixed cost is $750. The firm's best strategy in the short run is to; A) Increase its price. B) Increase its output. C) Decrease its output. D) Maintain output at its present level. E) Shut down. Long-run ATC Unit costs