Exam 8: Short-Run Costs and Output Decisions

Consider an output beyond the minimum point of a firm's short run average total cost curve. At this level of output the firm can use its ________ input at a lower average cost but only by using its ________ input at a higher average cost.

The decision by firms of how to produce output is based on

The total revenue curve for a perfectly competitive firm will be a straight line with positive slope.

If the marginal cost curve is below the average variable cost curve, then

The short-run average total cost curve eventually begins to increase at an increasing rate because of

Refer to the information provided in Figure 8.9 below to answer the question(s) that follow. Figure 8.9 -Refer to Figure 8.9. At the market price of $18, if this farmer produces the profit-maximizing quantity, what profit will he make?

At the point where marginal cost equals average total cost, average total cost will be

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. At the market price of $8 per bushel, if this farmer produces the profit-maximizing level of soybeans, the profit would be

The upward-sloping portion of the perfectly competitive firm's average variable cost curve is the firm's short run supply curve.

The increase in total cost that results from producing one more unit of output is the marginal cost.

If marginal cost is between average variable cost and average total cost, then

In perfect competition, a firm's demand curve

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow Figure 8.5 -Refer to Figure 8.5. The marginal cost of the second drone is

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow Figure 8.5 -Refer to Figure 8.5. If six drones are produced, average fixed costs are

The marginal revenue curve for a perfectly competitive firm will be upward sloping.

A firm in a perfectly competitive industry can raise its price above the market price to increase revenue.

Refer to the information provided in Figure 8.1 below to answer the question(s) that follow. Figure 8.1 -Refer to Figure 8.1 above. If Cyndyʹs Floral Arrangements produces 100 silk flower arrangements, the average fixed costs are

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow Figure 8.5 -Refer to Figure 8.4. If twelve microwave ovens are produced, Micro Oven's total costs are

If P = MC and MC <ATC, then a perfectly competitive firm will earn ________ profits.

Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, price exceeds the firm's marginal and average variable costs. It follows that producing one more cupcake will cause this firm's