ECON E1010 - HWK 3 - Spring 2021 - Word Zakir Hashmi X Design Layout References Mailings Review View PDF Reader 10 Acrobat Tell me what you want to do R File Home Insert Help Share 1. Marginal profit is equal to 5. The maximum profit available to the firm is A) $20. A) marginal revenue minus marginal cost. B) $30. B) marginal revenue plus marginal cost. C) $35. C) marginal cost minus marginal revenue. D) $155 D) marginal revenue times marginal cost E) $180. E) marginal revenue divided by marginal cost. 2. The demand curve facing a perfectly competitive firm is A) the same as the market demand curve. B) downward-sloping and less flat than the market demand curve. 6. Use the following statements to answer this question: C) downward-sloping and flatter than the market demand curve. I. The firm's decision to produce zero output when the price is less than the average variable cost of D) perfectly horizontal. production is known as the shutdown rule. E) perfectly vertical. II. The firm's supply decision is to generate zero output for all prices below the minimum AVC. A) I and II are true. B) I is true and II is false. 3. Bette's Breakfast, a perfectly competitive eatery, sells its "Breakfast Special" (the only item on the C) II is true and I is false. menu) for $5.00. The costs of waiters, cooks, power, food etc. average out to $3.95 per meal; the costs D) I and II are false of the lease, insurance and other such expenses average out to $1.25 per meal. Bette should A) close her doors immediately 7. A perfectly competitive hardware manufacturer has total revenue of $85 million, total variable costs B) continue producing in the short and long run. of $45 million, and fixed costs of $10 million. What is the firm's producer surplus? C) continue producing in the short run, but plan to go out of business in the long run if price does not A) $85 million increase in the future. B) $70 million D) raise her prices above the perfectly competitive level. C) $40 million E) lower her output. D) $30 million + P TR MR TC MC 0 $30 $0 $15 $30 $30 $30 $25 $10 $30 $60 $30 $40 $15 $30 $90 $30 $60 $20 LAWN - $30 $120 $30 $85 $25 $3 $150 $30 $115 $30 $30 $180 $30 $150 $35 4. That the firm is perfectly competitive is evident from its A) increasing marginal cost. B) increasing total cost. C) zero economic profits. D) constant marginal revenue E) absence of marginal values at Q = 0. Page 3 of 8 1467 words DE English (United States) - + 80% Type here to search w 28% 1 0 0 4X ENG 10:06 AM 4/19/2021 E
