Briefly explain the relationship between market price and a firm's profitability in a perfectly competitive market
If the market price faced by a perfectly competitive firm is above the average total cost at the profit-maximizing quantity of output, then the firm is making profits. If the market price is below the average total cost at the profit-maximizing quantity of output, then the firm is making losses. If the market price is equal to the average total cost at the profit-maximizing level of output, then the firm is making zero profits.
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Which of the following is a problem associated with extreme levels of poverty?
A) High life expectancy B) High infant mortality C) High literacy D) Low fertility
Given the market demand and cost data in the above figure, the existence of a monopoly firm producing 8 million cubic feet of natural gas makes it possible to produce natural gas at a long-run average cost of
A) 10 cents per cubic foot. B) 20 cents per cubic foot. C) 30 cents per cubic foot. D) 40 cents per cubic foot.
Which of the following four firms would most likely be part of a monopolistically competitive market?
A) Lee, J Brand, Joe's Jeans, Paper Denim & Cloth, Levi's, and Wrangler are all producers of jeans. B) Mark sells the tomatoes he grew in his backyard at the local farmers market. C) The WaveHouse is the only place in San Diego where you can ride an indoor 10 foot wave. D) Amara Massage is the only firm which specializes in pre- and post-natal massage.
Marginal revenue is the
A. added revenue that a firm takes in when it increases output by one additional unit. B. additional profit the firm earns when it sells an additional unit of output. C. difference between total revenue and total costs. D. ratio of total revenue to quantity.