question
If ATC = Price a firm is
answer
Making normal profits
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The shut down price is equal to
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Minimum point of AVC
question
A firm earns economic profit if
answer
P>ATC
question
The firm's supply curve is made up of a part of which curve?
answer
MC
question
Which of the following measurements is not part of Mr. Darp?
answer
Total Revenue
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Which of the following is NOT a characteristic of Perfect Competition?
answer
Product Differentiation
question
If a firm has the potential to make more profit by increasing production, which of the following is true?
answer
MR > MC
question
In the short run, the firm will
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Continue to produce as long as the price is greater than P2
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A firm in breaking even/making normal profit if Price is
answer
= ATC
question
In microeconomics, the short run is defined as which of the following?
answer
A period during which some inputs in a firm's production process cannot be changed
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Suppose that a firm begins to hire workers for a newly completed plant with a fixed amount of machinery. As the firm hires additional workers, one would expect the marginal product to
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rise initially, but eventually fall
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At its current quantity, a firm finds that in order to increase potential profit, it must decrease its production. If P= price, MR = Marginal Revenue and MC Marginal Cost, which of the following reflects the firm's current situation?
answer
MR<MC
question
At the current quantity that the firm is selling, the firm has Marginal Cost of $200 while Marginal Revenue is $175. Which of the following is true?
answer
The firm's profits would increase if the firm decreased the quantity sold.
question
A competitive market with no barriers to entry is operating in the the long run. All firms are currently earning Zero Economic Profit. Now assume that the demand for the good sold in that market increases. What will happen in the long run?
answer
New firms will enter the market.
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Which of the following characteristics determines whether or not a firm will earn long-run economic profit?
answer
Barriers to entry
question
if P > ATC...
answer
graph is economic proft
question
if P = ATC...
answer
the graph is normal, break-even, zero economic proft
question
if ATC > P > AVC...
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the graph is loss, negative profit
question
if P = AVC...
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the graph is at shutdown point, indifferent between shutting down and producing
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if P < AVC...
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the graph is shutdown, must stop producing, cannot operate
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Mr. Darp is a straight line that consists of...
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Marginal revenue
Demand
Average revenue
Price
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what does profit maximizing mean?
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the sales level where profits are the highest
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how do you see profit maximization on a graph?
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it is the point where Mr. Darp meets the nike swoosh curve, then go straight down to see the quantity and straight left to see the price
question
If MR > MC...
answer
produce more!
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If MR < MC...
answer
produce less!
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If MR = MC...
answer
produce at the same rate!
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