question
At the profit-maximizing level of output
answer
MR = MC
question
Kevin quit his $65,000 a year corporate lawyer job to open up his own law practice. In Kevin's first year in business his total revenue equaled $150,000. Kevin's explicit cost during the year totaled $85,000. Using the information from Kevin's first year in business, what is his economic profit?
answer
$0
question
When price falls from P3 to P1, the firm finds that it
answer
Shut down immediately
question
A local potato chip company plans to operate out of its current factory, which is estimated to last 25 years. All cost decisions it makes during the 25-year period
answer
are short-run decisions
question
Which of the following is an example of an implicit cost?
answer
Forgone rent on office space owned and used by firm
question
Charlene sells cotton candy. The cotton candy industry is competitive. Charlene hires a business consultant to analyze her company's financial records. The consultant recommends that Charlene increase her production. The consultant must have concluded that Charlene's
answer
MR exceeds MC
question
A profit-maximizing monopoly will charge a price of
answer
P4
question
If the market price is P3, in the short run, the perfectly competitive firm will earn
answer
Negative economic profits but will try to remain open
question
A profit-maximizing monopoly will produce an output level of
answer
Q3
question
Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes per month. Her monthly total revenue is $5,000. The marginal cost of making a wedding cake is $300. In order to maximize profits, Laura should
answer
Make fewer than 20 wedding cakes/month
question
Alyson's pet sitting service experiences diminishing marginal productivity with the addition of the
answer
Third worker
question
If the market price is P1, in the short run, the perfectly competitive firm will earn
answer
Positive economic profits
question
Diminishing marginal product suggests that
answer
Marginal cost is upward sloping
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
