Economics Study Set 4
Quiz 12: Firms in Perfectly Competitive Markets
Refer to Table 12-1
Refer to Table 12-1.If the market price of each camera case is $8 and the firm maximizes profit,what is the amount of the firm's profit or loss? A) $0 (it breaks even) B) loss of $1,000 C) profit of $440 D) loss of $440
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Refer to Table 12-1.Suppose the fixed cost of production rises by $500 and the price per unit is still $8.What happens to the firm's profit-maximizing output level? A) It must fall. B) It must rise to offset the increased cost. C) It will remain the same. D) The firm will shut down.
Refer to Table 12-1.The firm will not produce in the short run if the output price falls below A) $8. B) $4. C) $3.20. D) $2.80.
Refer to Figure 12-1.If the firm is producing 700 units, A) it is making a profit. B) it is making a loss. C) it should cut back its output to maximize profit. D) it should increase its output to maximize profit.
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