Question :
Table 12-2
Apples (pounds)
Market Price per Pound
Total Revenue
: 1387787
Table 12-2
Apples (pounds)
Market Price per Pound
Total Revenue
(TR)
Average Revenue (AR)
Marginal Revenue (MR)
0
$3
$0
—–
—–
100
150
200
250
300
350
400
Table 12-2 lists the various pounds (lbs.) of apples that Margie Stattler can sell. Assume that Margie operates in a perfectly competitive market.
38) Refer to Table 12-2. What is Margie’s total revenue if she sells 250 pounds of apples?
A) $250
B) $500
C) $750
D) There is not enough information in the table to determine Margie’s total revenue.
39) Refer to Table 12-2. How many pounds of apples should Margie sell to maximize her profit?
A) 300 pounds
B) 400 pounds
C) This cannot be determined without knowing Margie’s total or marginal production costs.
D) This can be determined only when all of the values for market price, total revenue, average revenue and marginal revenue are given.
40) What is the relationship among the following variables in for a perfectly competitive firm: the market price, average revenue and marginal revenue?
A) Average revenue is equal to the market price; average revenue is greater than marginal revenue.
B) The market price is equal to both average revenue and marginal revenue.
C) Average revenue is equal to marginal revenue; average revenue is greater than the market price.
D) As a firm lowers the market price to sell more output, marginal revenue and average revenue will be less than the market price.
41) At the profit-maximizing level of output for a perfectly competitive firm,
A) price equals marginal cost.
B) average revenue equals average variable cost and price equals marginal cost.
C) marginal revenue equals marginal cost and average total cost equals average fixed cost.
D) price equals average revenue and marginal cost equals average variable cost.
42) For a perfectly competitive firm, at profit maximization,
A) market price exceeds marginal cost.
B) total revenue is maximized.
C) marginal revenue equals marginal cost.
D) production must occur where average cost is minimized.
43) At the profit-maximizing level of output for a perfectly competitive firm, price equals marginal cost. Which of the following is also true?
A) The difference between total revenue and total cost is the greatest.
B) Total revenue equals total cost.
C) Average revenue equals average total cost.
D) Marginal profit equals marginal cost.
44) If, for the last bushel of apples produced and sold by an apple farm marginal revenue exceeds marginal cost, then in producing that bushel the farm
A) added more to total cost than it added to total revenue.
B) added an equal amount to both total revenue and total cost.
C) added more to total revenue than it added to total cost.
D) maximized its profits or minimized its losses.
45) If a perfectly competitive apple farm’s marginal revenue exceeds the marginal cost of the last bushel of apples sold, what should the farm do to maximize its profit?
A) determine what the total revenue and total cost of production are
B) increase output
C) decrease output
D) lower its price to sell more
46) A perfectly competitive apple farm produces 1,000 bushels of apples at a total cost of $36,000. The price of each bushel is $50. Calculate the firm’s short-run profit or loss.
A) loss of $14,000
B) profit of $14,000
C) profit of $50,000
D) There is insufficient information to answer the question.
47) An increase in a firm’s fixed cost will not change the firm’s profit-maximizing output in the short run.
