chorizontal. below the market demand curve. the same as the market demand curve. Question 3 2 pts Which of the following statements is true? In long run, all firms in a perfectly competitive market will definitely leave the market if they make an economic profit. In short run, a firm in a perfectly competitive market will definitely shut down if it makes a loss. In long run, a firm in a perfectly competitive market will definitely continue to operate if it makes a loss. In short run, all costs vary with output. In long run, some costs, e.g., total wages paid to employees do not vary with output. olf some firms in a perfectly competitive market make an economic profit, some new firms will enter the market in long run. In short run, a firm never experiences diminishing marginal product of labor. Question 4 2 pts Consider the graph below for a monopolist firm. Price MC $25 $13 $10 MR D 100 150 Quantity If a firm is producing a quantity of 150 and charging a price of $13, it oshould reduce production to 100 units and drop the price to $10 to maximize profits.should continue to produce at 150 units but raise the price to $25 to maximize profits. should reduce production to 100 units and raise the price to $25 to maximize profits. should continue to produce 150 units and continue to charge the price at $13 to maximize profits. cshould continue to produce 150 units and reduce the price to $10 to maximize profits. Question 5 2 pts Suppose the market is perfectly competitive. When total revenue received by a firm is less than its total variable costs, the firm in short run cshould shut down. oshould stay open. cmakes a profit. omaximize its total fixed costs. cshould increase production. Question 6 2 pts Samantha owns a gas station. If she moves into a larger lot and finds that her average total costs have decreased in the long run, we know that Samantha is experiencing Cincreasing fixed cost. cdiminishing marginal product. diseconomies of scale. constant returns to scale. Ceconomies of scale. Question 7 2 pts With quantity of output on the horizontal axis, the total fixed cost curve is U-shaped. ca horizontal straight line. downward sloping. cis always below the total variable cost curve.Cabove the total cost curve. Question 8 2 pts If a tax is imposed on a good where both supply and demand are somewhat elastic (not perfectly elastic), but demand is less elastic than supply, the burden of the tax will be borne cby consumers and producers equally. be consumers alone. cby producers alone. cmostly by consumers but partially by producers. cmostly by producers but partially by consumers. Question 9 2 pts Consider the graph of Marginal Product (MP) of labor below. Based on the given graph of MP, which of the following graphs shows the corresponding graph of Total Output? \fTotal output 10 20 Labor C Total output 10 20 Labor Question 10 2 pts Firm C is a monopolist firm, and firm C makes a profit. Which of the following is a correct graph for firm C? The graph should show the correct MC, MR, demand curve and the ATC, and correctly indicate the profit. C Price The profit is indicated by the area of the rectangle Quantity C Price , , . _ The profit IS Indicated by the area of the rectangle MR MC Quantity C Price The profit is indicated by the area of the rectangle MC ATC Profit D MR Quantity C Price The profit is indicated by the area of the rectangle ATC A MC Profit MR D Quantity Question 11 2 ptsThe market for apples is perfectly competitive. Currently, all firms in the market make a positive profit. Which of the following shows a correct graph for an individual firm? The graph should show the correct MC, MR, and ATC and correctly indicate the profit-maximizing quantity. C Profit and cost Profit maximizing quantity C Profit and cost Profit maximizing quantity Question 12 2 pts A firm first experiences diseconomies of scale and then constant return to scale when it increases its output. Which of the following graphs correctly shows the LRATC of that firm? C Long run ATC Q C Long run A ATC QC Long run A ATC Q C Long run ATC Q Question 13 2 pts Consider the market for good H. Assume that demand for good H is perfectly inelastic. A tax is levied on sellers. Which of the following graphs correctly shows the effects of the tax? The graph should also correctly indicate CS, PS, and tax revenue after tax. C Price CS Tax PS DWL revenue D1 D2 Quantity C Price S CS DWL Tax revenue PS D1 D2 QuantityC Price DWL Tax revenue PS S D1 D2 Q2 Q1 Quantity C Price D S2 CS Tax revenue PS Quantity 3 pts Question 14Consider the following graph of an individual firm in a perfectly competitive market. Price and Cost /ATC P Quantity (a) As MR curve is below the ATC curve, does the firm make a profit or a loss? [ Select ] (b) In long run, will the market price increase or decrease? [ Select ] Question 15 2 pts Refer to the following graph. If the firm maximizes profit, calculate the total cost (TC). Answer: The total cost = $