Reference no: EM133359372

Questions

1. If government regulations significantly increase the cost of operating within a particular market, one result is that

new firms are discouraged from entering the market.
barriers to entry are nullified.
a perfectly competitive market environment is encouraged.
new firms are encouraged to enter the market.

2. If the firm is producing at a quantity of output where the marginal revenue (MR) exceeds marginal cost (MC), then

The firm should keep expanding production.
The firm's perceived demand curve will shift to the left.
MR>MC, the firm is now earning zero profits.
each marginal unit adds profits by bringing in less revenue than it cost.

3. In deciding what price to charge, the first step a profit - maximizing competitor would take is ...?

To determine average costs, total revenue, and profit
To determine what price to charge for the products
To select the profit maximizing quantity to produce
To determine total revenue, total cost, and profit

4. A profit- maximizing monopoly

Should follow the rule of producing where TR= MR and charging a price along the demand curve
Should follow the rule of producing where MR > TR
Should follow the rule of producing where MR=MC
Setting the price at a level that will maximize its' per unit price.