What is MR and MC of q=6 when P=50?

Select one:

a. MR is 20, MC is 250

b. MR is 60, MC is 22

c. MR is the change in total revenue no matter how the output changes, MC is the change in total cost regardless of how output changes.

d. MR is 50, and MC is 20

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Producer surplus is closely related to profit and in the long run it is equal to profit.

Select one:

a. True

b. False

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Based on the above information for a company, where both materials cost and labor cost are variable costs, what is the marginal cost of producing an output above 80 units, up to 100 units?

Select one:

a. $38

b. $42

c. $58

d. $28

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A long-run competitive equilibrium occurs when three conditions hold. Which of the following is not one of them?

Select one:

a. No firm has an incentive either to enter or exit the industry because all firms are earning zero economic profit.

b. The price of the product is such that the quantity supplied by the industry is equal to the quantity demanded by consumers.

c. All firms in the industry are maximizing profit.

d. Some first produces output level where P is bigger than MC and others produces output level where P is lower than MC.

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Which of the following is wrong? Profit, = R - C, is maximized at the point at which

Select one:

a. R is at its maximum

b.

change in /change in q= change in R/change in q - change in C/change q = 0

c. an additional increment to output leaves profit unchanged, i.e. change in /change in q = 0

d. MR(q) = MC(q)

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Which of the following is wrong? In a competitive market, it is assumed that

Select one:

a. Goods and services that firms produce homogeneous.

b. Firms are free to enter or exit the market; there are not special costs for entering or exiting.

c. Products that the firms produce differentiated.

d. A firm is a price taker.

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If the total cost of a firm is given by C(q) = 4q2 + 16, which of the following is the ATC?

Select one:

a. q(4q+16)

b. 4q

c. ATC cannot be determined in terms of q.

d. 4q+16/q

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Which of the following is wrong about profit calculation? -profit, R-total revenue, C-total cost

Select one:

a.

= q(P - ATC)

b.

= Pq - C

c. = qATC-Pq

d. (q) = R(q) - C(q)

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The demand curve d facing an individual firm in a competitive market is both its average revenue curve and its marginal revenue curve. Along this demand curve, marginal revenue, average revenue, and price are all equal.

Select one:

a. False

b. True

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You are hired by a firm that produces a product that sells from $60. The owners of the firm is not sure about what output to produce to maximize their profit? And they are not sure what output (q) to produce to maximize their profit if the price goes down to $50. Which of the following (s) would help you determine the profit maximizing outputs at P=$60 and P=50?

Select one:

a. Calculate AC (by dividing C by q), then calculate the profit for each output by q(P-AC), and see where the profit is maximum.

b. Calculate R at each at each price level by multiplying q with P, and then look for maximum difference between R and C.

c. Calculate MC (change in C over change in q), and then look where P=MC. When MC gets bigger than P, that additional output should not be produced.

d. All the other options would enable me to determine the profit maximizing output.

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If you were the manager of the above aluminum smelting plant, which of the following would be wrong to do?

Select one:

a. When the market price per ton aluminum is $1200, produce 900 tones

b. When the market price per ton aluminum is $ 1150, produce 600 tones

c. When the market price per ton aluminum is $ 1320, produce 900 tones

d. When the market price per ton aluminum is $ 1400, produce 900 tones

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