You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's cost function is C = 60 + 4Q2. Your firm's maximum profits are:
A. 60.
B. 40.
C. 80.
D. 36.
Answer: B
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In the simple circular-flow diagram, households
a. are the only decision makers. b. own the factors of production. c. are buyers of inputs. d. consume only some of the goods and services that firms produce.
The freedom of entry and exit is key to pressuring economic profit to zero under
A. monopoly and monopolistic competition. B. monopoly and perfect competition. C. oligopoly and monopoly. D. perfect competition and monopolistic competition.
Exhibit 7-16 Short-run cost curves for a competitive firm
?
In Exhibit 7-16, if the market price of its product is $50 per unit, then the firm will:
A. break even. B. shut down. C. exit the industry. D. earn a positive economic profit.
Refer to the data. Assuming that the firm is motivated by self-interest and that the 20 units that can be produced with each technique can be sold for $2 per unit, the firm will:
Answer the question using the following data, which show all available techniques for producing 20 units of a particular commodity:
A. realize an economic profit of $10.
B. realize an economic profit of $4.
C. not earn any economic profit.
D. shut down rather than incur a loss by producing.