Use the following figure to answer the next question.
If the firm is producing at Q1, the area 0BEQ1 represents the
A. total variable cost.
B. total cost.
C. average variable cost.
D. total fixed cost.
Answer: A
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Marginal cost is the increase in total ________ that results from a one-unit increase in ________
A) fixed cost; the fixed input B) cost; output C) variable cost; the variable input D) fixed cost; output
For a promoter to maximize profit, he will have to sell out the venue.
Answer the following statement true (T) or false (F)
Use the following graphs to answer the next question.
The graphs show the long-run average total cost (LRATC) curve for cars. For which graph is the output level Q0 at minimum efficient scale?
A. Graph 1 B. Graph 2 C. Graph 3 D. Graph 4
If a profit-maximizing firm hires an additional unit of labor, what must be true about labor's wage and marginal revenue product?
a. Its wage always equals its marginal revenue product. b. Its wage is always greater than its marginal revenue product. c. Its wage is always total revenue minus marginal revenue product. d. Its wage is always greater than or equal to its marginal revenue product. e. Its wage is always less than or equal to its marginal revenue product.