In the short run, if a firm finds itself producing at a loss, it will a. Shut do
ID: 1231550 • Letter: I
Question
In the short run, if a firm finds itself producing at a loss, it willa. Shut down
b. Raise the price and lower the quantity of output
c. Lower the cost and raise the quantity of output
d. Not necessarily do any of the above
27. As new firms enter an industry, (ceteris paribus)
a. The industry supply curve will shift to the right, product prices will fall, and output will increase
b. The industry supply curve will shift to the left, product prices will rise, and output will fall
c. The industry supply curve will shift to the left, product prices will fall, and output will rise
d. The industry supply curve will shift to the right, product prices will rise, and output will fall
28. Sometimes market size and/or high capital costs create a market that can support only one firm. Usually such a firm may be legal and may have its rates regulated. Economists would say this firm
Is a monopolistic competitor
Is a natural monopoly
Is an oligopoly
Is a perfect competitor
29. For a firm in perfect competition in the long run
a. P = MR > MC = ATC
b. P > MR = MC = ATC
c. P < MR = MC < ATC
d. P = MR = MC = ATC
30, In the short run, a firm should shut down its operations if
a. Its losses are less than Total Fixed cost when it is at the MR = MC point.
b. Its losses are greater than Total Fixed cost when it is at the MR = MC point
c. Total Revenue is less than Total Cost
d. Total Revenue exceeds Total Variable Cost
Explanation / Answer
answers in order a. Shut down 27. c. The industry supply curve will shift to the left, product prices will fall, and output will rise 28 . Is a monopolistic competitor 29. d. P = MR = MC = ATC 30. b. Its losses are greater than Total Fixed cost when it is at the MR = MC point please rate