Reference no: EM132155339

Need some help to select answer for each Q

1.In the short -run, which of the following firms should attempt to produce where average total costs are at a minimum in order to maximize profits to minimize losses?

a. a perfectly competitive firm

b. Lipsey and Steiner's Economics Chapter 19, a monopolistically competitive firm

c. an oligopoly

d. a monopoly

e. none of the above

2.If the price is less than the average total cost for a perfectly competitive firm in the short-run, then the firm

a. is earning an economic profit.

b. should continue to operate as long as price is above the average variable cost

c. should shut down

d. should continue to operate as long as price is above the average fixed cost.

e. is breaking even

3.In the long run, i f a perfectly competitive industry has some firms suffering losses, we can expect

a. the market supply curve to shift to the left

b. those firms losing money to leave the industry

c. the market price to rise

d. losses in the industry to disappear

e. all of the above

4.If a firm in a perfectly competitive industry takes advantage of economies of scale and expands its production facilities, then

a. we must be in the long run because plant size is not fixed.

b. its cost curves will shift down, enabling it to earn a greater profit, at least for a little while.

c. other firms will be forced to do the same to survive.

d. the market price is decreased because of greater output finding its way to the market.

e. all of the above.

5.Which of the following is true of the pure monopolist?

a. The demand curve facing the product is the market demand curve.

b. Producers sell a product for which there are many substitutes.

c. Producers are price takers.

d. Producers always charge the highest possible price

e. Producers enjoy complete freedom of entry into and out of the industry.