Question :
31) For a firm in a perfectly competitive market, price : 1245258
31) For a firm in a perfectly competitive market, price is
A) equal to both average revenue and marginal revenue.
B) equal to average revenue but greater than marginal revenue.
C) greater than marginal revenue but less than average revenue.
D) less than both average revenue and marginal revenue.
32) Marginal revenue is
A) total revenue divided by the total quantity of output.
B) the change in profit divided by the change in the quantity of output.
C) the change in total revenue divided by the change in total cost.
D) the change in total revenue divided by the change in the quantity of output.
33) In a graph that illustrates a perfectly competitive firm, marginal revenue is
A) a diagonal line that lies below the firm’s demand curve.
B) a line that intersects the firm’s demand curve from below at its lowest point.
C) a line that intersects the firm’s average total cost curve from below at its lowest point.
D) the same as the firm’s demand curve.
34) The marginal revenue curve for a perfectly competitive firm
A) is downward-sloping.
B) is the same as its demand curve.
C) is perfectly inelastic.
D) is the same as its marginal cost curve.
35) Mark Frost grows apples in a perfectly competitive market. If we drew a line in a graph that illustrates Mark’s total revenue from selling apples, it would be
A) a straight, upward-sloping line.
B) a horizontal line.
C) a straight, downward-sloping line.
D) a curve that is negatively sloped at low levels of output and positively sloped at higher levels of output.
36) Producing where marginal revenue equals marginal cost is equivalent to producing where
A) average total cost equals average revenue.
B) average fixed cost is minimized.
C) total revenue is equal to total cost.
D) total profit is maximized.
37) A perfectly competitive firm’s marginal revenue
A) is greater than price.
B) is less than price because a firm must lower its price to sell more.
C) is equal to price.
D) may be either greater or less than price, depending on the quantity sold.
Table 9-2
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 9-2 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 9-2. 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 9-2. 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.
