Marginal revenue is equal to

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Reference no: EM132078818

1) Marginal revenue is equal to

a. the change in total revenue from selling one more unit of a good.

b. the number of units sold times the price of the good.

c. the change in average revenue from selling one more unit of a good.

d. all of the above

2) A firm's marginal cost curve above the minimum of the average variable cost curve is also

a. the firm's demand for production curve.

b. the firm's producer surplus curve.

c. the firm's short-run supply curve.

d. the market supply curve.

3) If the market demand decreases for a good sold in a perfectly competitive market, firms in the market

a. will be able to charge a higher price for their product.

b. will receive a lower price for their product.

c. will not be able to change their price.

d. will not be affected by the change in demand.

4) If the demand curve faced by a firm is horizontal, then the firm is ________ and a ________.

a. perfectly competitive; price taker

b. perfectly competitive; price maker

c. a monopoly; price taker

d. monopoly; price maker

5) A constant cost industry is one in which

a. input prices do not change as output changes in the long-run.

b. supply is highly inelastic.

c. short-run supply is horizontal.

d. all of the above

6) An increasing-cost industry is one in which the average cost of production ________ as the total output of the industry ________.

a. increases; increases

b. increases; decreases

c. decreases; increases

d. None of the above; there are no increasing-cost industries.

7) Marginal revenue is equal to price for a perfectly competitive firm because

a. total revenue increases by the price of the good when an additional unit is sold.

b. total revenue increases by less than the price of the good when an additional unit is sold.

c. firms need to lower price to increase the quantity sold.

d. firms can increase price and still increase the quantity sold.

8) A firm will not shut down in the short run as long as at the point where MR = MC

a. P > AVC.

b. P > ATC.

c. P > MC.

d. P > AFC.

Reference no: EM132078818

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