Question : 11) If the market price $50 per unit for a : 1226172

11) If the market price is $50 per unit for a good produced in a perfectly competitive market and the firm’s average total cost is $52, then the firm

A) incurs an economic loss of $2 per unit.

B) makes an economic profit of $2 per unit.

C) makes zero economic profit.

D) incurs a total economic loss of $52.

E) More information is needed to determine the firm’s economic profit or loss per unit.

12) Peter’s Pencils is a perfectly competitive company producing pencils. Suppose Peter is producing 1,000 pencils an hour. If the total cost of 1,000 pencils is $500, the market price per pencil is $2, and the marginal cost is $2, then Peter

A) makes an economic profit because marginal revenue is equal to marginal cost at this output level.

B) should decrease his output to increase his profit.

C) is maximizing his profit and is making an economic profit.

D) should increase his output to increase his profit.

E) is not maximizing his profit but is making zero economic profit anyway.

13) Suppose that marginal revenue for a perfectly competitive firm is $20 . When the firm produces 10 units, its marginal cost is $20, its average total cost is $22, and its average variable cost is $17. Then to maximize its profit in the short run, the firm

A) should stay open and incur an economic loss of $20.

B) must increase its output to increase its profit.

C) must decrease its output to increase its profit.

D) should shut down.

E) should not change its production because it is already maximizing its profit and is making an economic profit.

14) A perfectly competitive firm is producing 50 units of output, which it sells at the market price of $23 per unit. The firm’s average total cost is $20. What is the firm’s total revenue?

A) $23

B) $150

C) $1,000

D) $1,150

E) $20

15) A perfectly competitive firm is producing 50 units of output and selling at the market price of $23. The firm’s average total cost is $20. What is the firm’s total cost?

A) $23

B) $150

C) $1,000

D) $1,150

E) $20

16) A perfectly competitive firm is producing 50 units of output and selling at the market price of $23. The firm’s average total cost is $20. What is the firm’s economic profit?

A) $23

B) $150

C) $1,000

D) $1,150

E) $50

17) For a perfectly competitive syrup producer whose average total cost curve does not change, an economic profit could turn into an economic loss if the

A) market demand for syrup decreases.

B) marginal cost curve shifts downward.

C) market demand for syrup does not change.

D) market demand for syrup increases.

E) price of syrup rises.

18) For a perfectly competitive rancher in Wyoming, if the price does not change, an economic profit could turn into an economic loss if the

A) average total cost curve shifts downward.

B) average total cost curve does not change.

C) average total cost curve shifts upward.

D) marginal cost curve shifts downward.

E) average fixed cost decreases.

19) A perfectly competitive firm should shut down in the short-run if price falls below the minimum of

A) marginal cost.

B) marginal revenue.

C) average total cost.

D) fixed costs.

E) average variable costs.