Reference no: EM131031374

1.To find the output at which the firm maximizes its profits you MUST know the firm's

A. ATC                                      

B. AVC

C. AFC

D. MC

2. To maximize profits, a firm should produce at an output up to the point where

A. the difference between the price and marginal cost is at its maximum

B. total cost equals total revenue

C. price equals marginal cost

D. total revenue equals variable cost

3. STATEMENT I. Marginal revenue is the additional revenue from selling one more unit of output. STATEMENT II. A firm will always produce at an output at which marginal revenue is greater than marginal cost, except when it is minimizing its losses.

A. statement I is true and statement II is false.

B. Statement I is false and statement II is false.

C.Both statements are true

D. Both statements are false

4. The firm's short-run supply curve runs up the marginal cost curve

A. to the shutdown point

B. from the shutdown point all the way up the curve

C. to the break-even point.

D. from the break-even point all the way up the curve.

5. which statement is true?

A. the minimum point on the firm's marginal cost curve is the shut-down point.

B. the minimum point on the firm's marginal cost curve is the break-even point.

C. the minimum point on the firm's average variable cost curve is the shut-down point.

D. the minimum point on the firm's average total cost curve is the shut-down point.

6. At the level of output where marginal revenue equals marginal cost, assume that the price of a competitive firm's product is between the firm's average total cost curve and its average variable cost curve. In this case the firm would

A. decrease output to reduce the cost

B. continue to operate in the short run

C. shut down

D. increase output to increase profit

E. continue to operate idefinitely