Question

If average total cost (ATC) curve is always downward sloping, then

- A. marginal cost will cross ATC at its minimum
- B. average variable cost will cross ATC at its minimum
- C. the firm has economies of scale
- D. average fixed cost will cross ATC at its minimum

Given a U-shaped Average Total Cost (ATC) curve

- A. Average Fixed costs will always be above ATC
- B. Marginal cost will always be below ATC
- C. Average variable costs will always be below ATC
- D. Marginal cost will always be above ATC

The total revenue curve

- A. Will be a straight line from the origin for a single- price monopolist; but first increase, reach a maximum, then decrease for a perfectly competitive firm.
- B. Will first increase, reach a maximum, then decrease for both perfectly competitive a single- price monopolist firms.
- C. Will be a straight line from the origin for both perfectly competitive and single- price monopolist firms.
- D. Will be a straight line from the origin for a perfectly competitive firm; but first increase, reach a maximum, then decrease for a single- price monopolist

Answer #1

If the average total cost is always falling, this means as production increases costs fall.

The correct option is therefore

C. The firm has economies of scale.

2. When the average total cost curve is u shaped, the average variable cost will always be below the average cost curve because average variable cost is a subpart of the average total cost.

Hence the correct option is

C. Average variable cost will always be below ATC.

3. Will be a straight line from the origin for a perfectly competitive firm; but first increase, reach a maximum, then decrease for a single- price monopolist.

Short run cost curves:
a. Explain why the marginal cost curve intersects the average
total and variable cost curve at their respective minimum
values:
b. At what point on the ATC will a perfectly competitive firm
always produce in the long run:
c. The supply curve for a perfectly competitive firm is the same
as one of the cost curves based on a specific criterion. State both
the curve and the criterion:

The graph illustrates an average total cost (ATC) curve (also
sometimes called average cost), marginal cost (MC) curve, average
variable cost (AVC) curve, and marginal revenue (MR) curve (which
is also the market price) for a perfectly competitive firm that
produces toy spaceships. Please answer the three questions,
assuming that the firm is profit maximizing and does not shutdown
in the short run.
What is the firm's total revenue?
$
What is the firm's total cost?
$
What is the...

In class we looked at (short run) cost curves.
Explain why the marginal cost curve intersects the average total
and variable cost curves at their respective minimum values:
At what point on the ATC will a perfectly competitive firm
always produce in the long run:
The supply curve for a perfectly competitive firm is the same as
one of the cost curves based on a specific criterion. State both
the curve and the criterion:

Short Run Cost
1)Why is the ATC U-Shaped?
b)Why is marginal curve upward sloping in the short run ?
c)Where and why does the MC curve cross the ATC curve?
d)Given values for ATC and AVC,how would you determine Fixed
cost (what are the steps necessary to get from the first twoto the
last one )?
e)Given ATC,how would you determine total cost?
f)Graphically show and verbaly explain what the general pattern
of and relationship between fixed cost,variable cost and...

a) In the long run in a competitive constant-cost industry
A. A firm’s supply curve is upward sloping but the industry
supply curve is perfectly elastic at the minimum of AVC.
B. firm’s supply curve is upward sloping but the industry supply
curve is perfectly elastic at the minimum of ATC.
C. Both the industry and a firm’s supply curve are perfectly
elastic at the minimum of ATC.
2)Which of the following is correct?
A. In a competitive market buyers...

1) A perfectly competitive firm's short-run supply curve is
its:
A. average variable cost curve above the marginal cost
curve.
B. marginal cost curve above the average fixed cost curve.
C. marginal cost curve above the average total cost curve.
D. marginal cost curve above the average variable cost
curve.
2)Economic Profit
A. (per unit) is price minus average variable cost.
B. is correctly described by all of these.
C. as a total amount, is (P - ATC) times quantity....

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....

29. A monopolist faces a downward sloping demand curve, P = 461.0 -
13.5*Q. The maximum total revenue will be ____. A) $3935.57 B)
$461.0 C) $691.5 D) $922.0 30. If the price in a competitive market
is $30, and the demand curve is given by the equation P = 90 - 3Q,
then the consumer surplus will be ____. A) $1,000 B) $1,200 C) $600
D) $300 31. The short-run supply curve of a firm in perfect
competition is...

1) A perfectly competitive firm that sells fish has a marginal
cost function given by MC = 3q. The market has determined a price
of P = 60. How many fish will this firm produce?
2)See the previous question about the perfectly competitive fish
firm. Suppose that at this level of output, the firm has average
costs of production of ATC = 42. How much total economic profit
will the firm earn?
3) A perfectly competitive firm will shut down...

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...

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