Question

State whether the following are true or false and give reason

5.pricing accommodates different groups of consumer with uniform demand functions.

6. The form of the relationship between total, average and marginal functions is the same whether it is applied to total revenue, total cost, or profit.

7. Marginal revenue reaches a maximum at the same level of output that total revenue reaches a maximum.

8. If a firm is producing a level of output where marginal profit is equal to zero, then the level of output is optimal.

9. A firm should continue to increase an activity so long as the total revenue from the activity exceeds the total cost of the activity.

10. A firm’s total revenue will increase if it raises the price of a product that has a price elasticity of demand equal to -0.7.

Answer 1

Answer 1:

True: because of they have same relationship between total,average and marginal function are applied for total revenue,total cost or profit.

Answer 2:

False: if when total revenue reach maximum,that marginal curve reach zero.

Answer3:

True:if additional one more of profit is equal to zero,the output level is optimal,because of after getting zero level of marginal profit producer not producing extra good so it true.

Answer 4:

True: it's true because continues production need more cost so it's exceed from total revenue.

Answer 5:

False: because of if price of an elastic good will decrease the total revenue so not equea to -7