question
When marginal cost is greater than average cost, average cost is
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rising.
question
Economies of scale occur when a firm's
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long-run average total costs are decreasing as output increases.
question
Refer to Figure 13-9. At output levels greater than N, the firm experiences
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diseconomies of scale.
question
A firm that wants to achieve economies of scale could do so by
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assigning limited tasks to its employees, so they can master those tasks.
question
When marginal revenue equals marginal cost, the firm
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may be minimizing its losses rather than maximizing its profit.
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A production function describes
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how a firm turns inputs into output.
question
Which of the following expressions is correct for a competitive firm?
answer
profit = (quantity of output) x (price - average total cost)
question
Refer to Table 14-1. Over which range of output is average revenue equal to price?
answer
Average revenue is equal to price over the entire range of output.
question
Refer to Figure 14-1. The firm will earn a negative economic profit but remain in business in the short run if the market price is
answer
less than $6.30 but more than $4.50.
question
In a competitive market the price is $8. A typical firm in the market has ATC = $6, AVC = $5, and MC = $8. How much economic profit is the firm earning in the short run?
answer
$2 per unit
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