Firm Decision-Making: Profit, Output, and Short-Run Choices Online Quiz Questions

True or false: For a firm selling output at a given price, average revenue equals price per unit.

A firm sells 100 units at $8 per unit. What is its total revenue?

What term describes a firm that accepts the market price as given rather than choosing its own price?

Which relationship generally describes price, average revenue, and marginal revenue for a firm with market power?

Select all statements that correctly apply the marginal revenue and marginal cost decision rule.

True or false: A firm should always shut down in the short run whenever its economic profit is negative.

A perfectly competitive firm faces a price of $18. Its marginal costs for units 1 through 8 are $10, $8, $6, $8, $12, $16, $20, and $26. What output maximizes profit?

A perfectly competitive firm sells for $25. At its current output, MC is $18, ATC is $30, and AVC is $15. What should the firm do?

Select all statements that correctly describe a perfectly competitive firm’s short-run operating choices.

Using the following profit data, which output earns the highest economic profit: output 4 has profit $6, output 5 has profit $10, output 6 has profit $8, and output 7 has profit $0?

Select all correct steps for analyzing a standard perfectly competitive firm graph.

Explain why a firm might rationally continue producing in the short run even when it has a negative economic profit. In your answer, distinguish fixed costs from variable costs and compare operating with shutting down.

If an MR curve intersects an MC curve more than once, which intersection should normally determine the firm’s profit-maximizing output?

True or false: Economic profit accounts for both explicit costs and implicit opportunity costs.

Which statement correctly describes average revenue for a firm?

A firm sells 70 units at $12 per unit. What is its total revenue?

True or false: A firm’s profit can decrease even while its total revenue continues to increase.

A perfectly competitive firm faces a price of $24. At its current output, marginal cost is $17. What should the firm do next, assuming marginal cost is on its rising portion?

A firm has fixed costs of $2,400, a price of $18 per unit, and a constant average variable cost of $10 per unit. What is its break-even quantity?

True or false: If marginal revenue and marginal cost intersect more than once, the firm should normally choose the intersection on the rising portion of the marginal cost curve.

A perfectly competitive firm produces 8 units at a market price of $16. Its total cost at 8 units is $102. What is its economic profit?

Using the following schedule, which output maximizes profit? At 4 units, total revenue is $80 and total cost is $74; at 5 units, total revenue is $100 and total cost is $90; at 6 units, total revenue is $120 and total cost is $112; at 7 units, total revenue is $140 and total cost is $140.

A perfectly competitive firm faces a price of $18. Its total costs are $74 at 5 units, $90 at 6 units, and $110 at 7 units. Which output gives the greatest profit among these choices?

At an output of 90 units, a firm has total variable cost of $1,080. What is its average variable cost?

On the standard perfectly competitive firm graph, what does the rectangle representing profit or loss measure?

A firm sells 100 units at a price of $8 per unit. What is its total revenue?

Which relationship among price, average revenue, and marginal revenue generally describes a firm with imperfect competition?