8. Ram Corporation has the following cost function:

TC = Q³ - 24 Q² + 600 Q + 100,

where Q is the number of units of output produced. The output level where marginal cost is minimized is ... and the output level where average variable cost is minimized is ...

A. 12 and 8 units, respectively.

B. 8 and 12 units, respectively.

C. 8 and 10 units, respectively.

D. 8 and 14 units, respectively.

E. none of the above.

9. If the long run total cost is TC = 80 Q - 2 Q², this production process is characterized by

A. economies of scale.

B. diseconomies of scale.

C. constant economies of scale.

D. none of the above.

10. Bette's Breakfast, a perfectly competitive eatery, sells its "Breakfast Special" (the only item on the menu) for $5.00. The costs of waiters, cooks, power, food etc. average out to $3.95 per meal; the costs of the lease, insurance and other such expenses average out to $1.25 per meal. Bette should

A. close her doors immediately.

B. continue producing in the short and long run.

C. continue producing in the short run, but plan to go out of business in the long run.

D. raise her prices above the perfectly competitive level.

E. lower her output.

D. None of the above.