Reference no: EM131994618
1: For a theoretical natural monopolist with down-sloping average total cost (ATC) curve
-If government sets price below the unregulated monopolist price, but above the firm's ATC, the profit maximizing monopolist firm will go out of business and not produce any output.
-If government sets price below the unregulated monopolist price, but above the firm's ATC, the profit maximizing monopolist firm will DECREASE its level of output.
-If government sets price below the unregulated monopolist price, but above the firm's ATC, this will not chnge the profit maximizing monopolist firm's level of output.
-If government sets price below the unregulated monopolist price, but above the firm's ATC, the profit maximizing monopolist firm will INCREASE its level of output.
2: Given the total cost function for a firm is
(Q = output and TC = total cost)
Q TC
0 0
1 20
2 39
3 56
4 71
5 84
6 95
the average total cost of producing six units of output is $15.83
True
False
3: Given the total cost function for a firm is
Q = output and TC = total cost
Q TC
0 20
1 40
2 60
3 80
4 100
5 120
6 140
the production function that generated these costs must have increasing marginal product of the variable input (labor)
True
False
4: Given the total cost function for a firm is
Q = output and TC = total cost
Q TC
0 20
1 40
2 60
3 80
4 100
5 120
6 140
The average total cost of producing 6 units of output is $23.33
True
False