Question :
31) Refer to Table 11-4. Victoria’s profit-maximizing output where
A) total : 1244635
31) Refer to Table 11-4. Victoria’s profit-maximizing output is where
A) total profit equals $3.
B) marginal revenue and marginal cost both equal $4.
C) marginal revenue and marginal cost both equal $3.
D) marginal cost is at its minimum value.
32) Refer to Table 11-4. At Victoria’s profit-maximizing output
A) profit equals $2.
B) total revenue equals $24 and total cost equals $20.
C) total revenue equals $25 and total cost equals $22.
D) total revenue equals $21 and total cost equals $17.
33) The profit-maximizing rule for a monopolistically competitive firm is to select the quantity at which
A) marginal revenue equals marginal cost.
B) average revenue exceeds marginal cost by the greatest amount.
C) price equals marginal cost.
D) average revenue equals average total cost.
Figure 11-7
Figure 11-7 shows short-run cost and demand curves for a monopolistically competitive firm in the footwear market.
34) Refer to Figure 11-7. Which of the following statements describes the best course of action for the firm depicted in the diagram?
A) The firm should exit the industry because its price is less than its average total cost.
B) The firm should minimize its losses by producing Qy units and charging a price of P0.
C) The firm should minimize its losses by producing Qy units and charging a price of P2.
D) The firm should minimize its losses by producing Qy units and charging a price of P1.
35) Refer to Figure 11-7. Which of the following is the area that represents the profit or loss experienced by the firm?
A) A loss represented by the rectangle P2uvP1.
B) A loss represented by the rectangle P2uwP0.
C) A loss represented by the rectangle P1vwP0.
D) An accounting profit equal to P1vwP0.
Table 11-5
Quantity
Price
Total Cost
1
$18
$14
2
16
20
3
14
26
4
12
32
5
10
38
6
8
44
Table 11-5 shows the demand and cost data facing a monopolistically competitive producer of canvas bags.
36) Refer to Table 11-5. What are the firm’s profit-maximizing or loss-minimizing price and quantity?
A) price = $10; quantity = 5.
B) price = $12; quantity = 4.
C) The firm should shut down temporarily.
D) This cannot be determined from the information given.
37) Refer to Table 11-5. At the profit-maximizing or loss-minimizing output level
A) the firm makes a profit of $12.
B) the firm incurs a loss equal to its fixed cost.
C) the firm makes a profit of $16.
D) the firm incurs a loss of $14.
38) A monopolistically competitive firm is producing an output level where marginal revenue is greater than marginal cost. What should this firm do to increase its profit or reduce its losses?
A) The firm should raise its price.
B) The firm should decrease its fixed costs.
C) The firm should increase its implicit costs.
D) The firm should lower its price.
39) Suppose a monopolistically competitive firm’s output where marginal revenue equals marginal cost is 66 units and the price corresponding to this quantity is $18. If the average total cost at this output is $16.55, then its total profit is
A) $1,188.
B) $1,092.30.
C) $95.70.
D) $1.45.
40) If a monopolistically competitive firm is producing 50 units of output where marginal cost equals marginal revenue, total cost is $1,674 and total revenue is $2,000, its average profit is
A) $326.
B) $40.
C) $6.52.
D) impossible to determine without additional information.
Figure 11-8
Figure 11-8 shows cost and demand curves for a monopolistically competitive producer of iced-tea.
