Question

16. The slope of the total variable cost curve is marginal cost. T/F If the average total cost is declining:

A. average cost is less than marginal cost.

B. average cost is greater than marginal cost.

C. output is above the minimum cost level.

D. the marginal cost curve lies above the average cost curve. Whenever marginal cost is above average total cost, average total cost is increasing. T/F

17. If a firm sells its output at a price of $25 and the marginal cost= $19, calculate the Lerner index. In addition, the firm’s price elasticity of demand is -9 and the price elasticity of demand for the overall market is -2. Calculate the Rothschild index. Based on the Lerner index and Rothschild index, what type of market structure does this most likely represent?

18. Five firms from an industry and have the following sales of $4.5, $9, $13, $3.7, and $13 million. Calculate the HHI.

19. Assume a monopoly has marginal costs= $10,000 and the price elasticity of demand= -2, find the profit maximizing price.

Answer #1

16. The slope of total variable cost is the marginal cost when production takes place in a short run and there are fixed and variable cost; marginal cost is the additional cost of employing additional variable input hence it is the slope of total variable cost.

the correct option is True

From the relationship between average cost and marginal cost; when average cost is declining then marginal cost lies below it.

the correct option is (b)

Similarly when marginal cost is above average cost then the average cost rises or is increasing.

the correct option is True

The Firm’s price elasticity of demand = –0.80
Firm’s marginal cost: $5
Market’s price elasticity of demand = –0.60
and the Firm’s selling price of output: $25.
What is the Rothschild index and the Lerner index? It suggests
the firm is what?
-- 1.33, 1.00, a monopoly
-- 0.025, 0.002, perfectly competitive
-- 0.75, 0.20, monopolistic competitive
-- 0.75, 0.80, an oligopoly
-- 0.25, 0.002, perfectly competitive

T/F - The area under the marginal cost curve measures total
variable costs.
Why is the short run average cost curve tangent to the long run
average cost curve at a level of output?
Why does the supply curve of a firm must be in the positively
sloped part of the MC curve and not in the negatively sloped
part?
In the long run, why is the long run industry supply curve flat
at min(AC)?

Consider the following data for a firm: Firm’s price elasticity
of demand = –0.80; Firm’s marginal cost: $5; Market’s price
elasticity of demand = –0.60; and Firm’s selling price of output:
$25. Based on this information, the Rothschild index is _______,
the Lerner index is _______, and these suggest the firm is
_______.
Group of answer choices
a. 0.75, 0.80, an oligopoly
b. 1.33, 1.00, a monopoly
c. 0.75, 0.20, monopolistically competitive
d. 0.25, 0.002, perfectly competitive
e. 0.025, 0.002,...

The vertical distance between the average total cost and the
average variable cost curves is:
a.
constant with respect to output.
b.
decreasing with respect to output.
c.
increasing with respect to output.
d.
equal to total fixed costs.
e.
none of the above.
1 points
QUESTION 11
The point at which the SRAC curve is tangent to the LRAC
curve:
a.
represents the most efficient wa to use a given plant.
b.
is always the output where MC=AC....

Graph the marginal cost curve, average variable cost curve,
marginal revenue curve ,average total revenue curve, profit, and
quantity produced for a firm that has these 3 characteristics
1. In a competitive market
2. Sell an ordinary good
3. 2 Input Cobb Douglas in which one variable is fixed in the
short run

2. The market for a good has an inverse demand curve of p = 40 –
Q and the costs of producing the good are defined by the following
total cost function: TC = 100 + 1.5Q2.
a. If this good is produced in a monopoly market, provide a
graph of the demand curve, marginal revenue curve and marginal cost
curve. Then calculate the equilibrium output and price .
b. Calculate the price elasticity of demand at the equilibrium
price...

2. The market for a good has an inverse demand curve of p = 40 –
Q and the costs of producing the good are defined by the following
total cost function: TC = 100 + 1.5Q2.
a. If this good is produced in a monopoly market, provide a
graph of the demand curve, marginal revenue curve and marginal cost
curve. Then calculate the equilibrium output and price.
b. Calculate the price elasticity of demand at the equilibrium
price and...

1. How are marginal and average product related graphically to
marginal and average variable cost?
a. They are mirror images of each other.
b. The maximums of the product curves are the minimum of the
cost curves.
c. As marginal and average product increase the respective cost
curves decrease.
d. All of the above.
2 How can long-run total cost be calculated?
a. Multiplying average costs by output.
b. Adding positive total fixed costs to total variable
costs.
c. Multiplying...

2. The market for a good has an inverse demand curve of p = 40 –
Q and the costs of producing the good are defined by the following
total cost function: TC = 100 + 1.5Q2.
a. If this good is produced in a monopoly market, provide a
graph of the demand curve, marginal revenue curve and marginal cost
curve. Then calculate the equilibrium output and price
. b. Calculate the price elasticity of demand at the equilibrium
price...

Total Output
Total fixed cost
Total Variable cost
Total Cost
Average Fixed Cost
Average variable cost
Average total cost
Marginal cost
0
0
24
0
0
0
8
8
8
38
19
27
9
13
59
I need your help on filling in the rest of the chart.
Thank you very much. If it is not to much trouble can you please
explain how you got the answer. again thank you for your
help.

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