Question :
61) As a perfectly competitive firm’s output increases, its total : 1226199
61) As a perfectly competitive firm’s output increases, its total revenue ________ and its total cost ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) does not change; increases
62) In a perfectly competitive industry, when a firm is producing so that its total revenue equals its total cost, the firm is
A) making an economic profit.
B) incurring an economic loss.
C) making zero economic profit.
D) definitely not maximizing its profit.
E) None of the above answers is correct because the relationship between total revenue and total cost has nothing to do with the firm’s profit or loss.
63) For a syrup producer in central Vermont, profit is maximized at the level of output for which total
A) revenue exceeds total cost by the largest amount.
B) revenue exceeds total cost by the smallest amount.
C) revenue is maximized.
D) cost is minimized.
E) revenue equals total cost.
64) A firm maximizes its profit by producing the amount of output such that
A) marginal revenue equals marginal cost.
B) marginal revenue exceeds marginal cost by some amount.
C) marginal revenue is maximized.
D) marginal cost is minimized.
E) marginal revenue exceeds marginal cost by the maximum amount possible.
65) For a perfectly competitive firm, profit maximization occurs when output is such that
A) total revenue (TR) is maximized.
B) total cost (TC) is minimized.
C) marginal revenue (MR) = marginal cost (MC).
D) average total cost (ATC) is minimized.
E) total revenue (TR) equals total cost (TC).
66) A perfectly competitive firm will maximize profit when the quantity produced is such that the
A) firm’s total revenue is equal to total cost.
B) firm’s marginal revenue is equal to the price.
C) firm’s marginal revenue is equal to its marginal cost.
D) price exceeds the firm’s marginal cost by as much as possible.
E) firm’s marginal revenue exceeds its marginal cost by the maximum amount possible.
67) For a perfectly competitive firm, profit is maximized at the output level where
i.total revenue exceeds total cost by the largest amount.
ii.marginal revenue equals marginal cost.
iii.price equals marginal cost.
A) i only
B) ii only
C) ii and iii
D) i and ii
E) i, ii, and iii
68) If a perfectly competitive wheat farmer is maximizing its profit and then increases its output, the farmer’s
A) total revenue increases, but total cost rises by more so that the farmer’s total profit decreases.
B) total revenue decreases and total cost increases, both thereby decreasing the farmer’s total profit.
C) total revenue does not change but total cost increases, thereby decreasing the farmer’s total profit.
D) marginal revenue increases, but so does marginal cost so that the farmer’s total profit increases.
E) total revenue and total cost both rise but the effect on the farmer’s total profit is uncertain.
69) To increase its profit, a perfectly competitive firm will produce more output when
A) price is greater than average fixed cost.
B) price is greater than marginal cost.
C) marginal cost is less than average total cost.
D) average variable cost is greater than average fixed cost.
E) price is greater than average variable cost.
70) In a perfectly competitive market, the market price is $23. At the current level of output, a firm has a marginal cost of $28. What should the firm do?
A) produce a larger output to make more profit
B) nothing, it is currently maximizing profit
C) produce less output to make more profit
D) shut down
E) raise the price of its product
