A firm in a perfectly competitive industry is producing 50 units, its profit-maximizing quantity. Industry price is $2, total fixed costs are $25, and total variable costs are $40. The firm's economic profit is
A) $15.
B) $30.
C) $35.
D) $60
C) $35.
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A monopolistically competitive industry is characterized by
a. many firms, differentiated products, and barriers to entry. b. many firms, differentiated products, and free entry. c. a few firms, identical products, and free entry. d. a few firms, differentiated products, and barriers to entry.
Suppose that a firm operating in perfectly competitive market sells 300 units of output at a price of $3 each. Which of the following statements is correct? (i) Marginal revenue equals $3. (ii) Average revenue equals $3. (iii) Total revenue equals $900
a. (i) only b. (iii) only c. (i) and (ii) only d. (i), (ii), and (iii)
The income elasticity of demand is:
A. the percentage change in quantity demanded divided by the percentage change in price. B. the percentage change in quantity demanded divided by the percentage change in income. C. the percentage change in income divided by the percentage change quantity demanded. D. the percentage change in price divided by the percentage change in income.
All of the following statements regarding the marginal revenue product (MRP) curve and the demand for labor are true EXCEPT
A) an individual firm's demand for labor is its MRP curve. B) under conditions of perfect competition, MRP equals marginal physical product multiplied by the product's price. C) an increase in the market demand for a given product decreases the product's price. D) the demand for labor is a derived demand.