105.
Refer to the accompanying diagram. The firm will realize an economic profit if price is
106.
Refer to the accompanying diagram. The firm will produce at a loss if price is
107.
Refer to the accompanying diagram. The firm will shut down at any price less than
10–64
108.
Refer to the accompanying diagram. The firm‘s supply curve is the segment of the
109.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
10–65
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. The marginal cost column reflects
110.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive market.
At 6 units of output, total fixed cost is and total
cost is .
111.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive market.
At 3 units of output, total variable cost is and
total cost is .
10–67
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
C. $20; $210
D. $60; $350
112.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. We can infer that, at zero output, this firm’s total
fixed, total variable, and total costs are
10–68
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: I
T o p i c :
Profit Maximization in the Short Run: Marginal-Revenue–Marginal-Cost Approach
Type: Table
113.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. If the market price for this firm’s product is $87, it
will produce
114.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
10–69
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. If the market price for this firm’s product is $68.10, it
will produce
115.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. If the market price for this firm’s product is $35, it
will produce
116.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. If the market price for this firm’s product is $24, it
will produce
10–71
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B.
6 units at a loss of $90.
C.
3 units at an economic profit of zero.
D. 4 units at a loss of $138.
117.
Total
Product
Average Fixed
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
1
$150.00
$25.00
$175.00
$ 25.00
2
75.00
23.00
98.00
21.00
3
50.00
20.00
70.00
14.00
4
37.50
21.00
58.50
24.00
5
30.00
23.00
53.00
31.00
6
25.00
25.00
50.00
35.00
7
21.43
28.00
49.43
46.01
8
18.75
33.00
51.76
68.07
9
16.67
39.00
55.67
86.95
10
15.00
48.00
63.00
128.97
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. If the market price for this firm’s product is $15, it
will produce
10–72
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: I
T o p i c :
Profit Maximization in the Short Run: Marginal-Revenue–Marginal-Cost Approach
Type: Table
118. A purely competitive seller should produce (rather than shut down) in the short run
119.
Total Output
Total Fixed Cost
Total Variable Cost
Total Cost
0
$50
$0
$50
1
50
70
120
2
50
120
170
3
50
150
200
4
50
220
270
5
50
300
350
6
50
390
440
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. The data are for
10–73
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
D i f f i c u lt y :
02 Medium
Learning Objective: 10–05 Explain how purely competitive firms can use the marginal-revenue–
marginal-cost approach to maximize profits or minimize losses in the short run.
Test Bank: I
T o p i c :
Profit Maximization in the Short Run: Marginal-Revenue–Marginal-Cost Approach
Type: Table
120.
Total Output
Total Fixed Cost
Total Variable Cost
Total Cost
0
$50
$0
$50
1
50
70
120
2
50
120
170
3
50
150
200
4
50
220
270
5
50
300
350
6
50
390
440
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. At 5 units of output, average fixed cost, average
variable cost, and average total cost
are
121.
Total Output
Total Fixed Cost
Total Variable Cost
Total Cost
0
$50
$0
$50
1
50
70
120
2
50
120
170
3
50
150
200
4
50
220
270
5
50
300
350
6
50
390
440
The accompanying table gives cost data for a firm that is selling in a purely competitive market.
The marginal cost of the fifth unit of output is
122.
Total Output
Total Fixed Cost
Total Variable Cost
Total Cost
0
$50
$0
$50
1
50
70
120
2
50
120
170
3
50
150
200
4
50
220
270
5
50
300
350
6
50
390
440
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. If product price is $75, the firm will produce
10–75
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
C.
5 units of output.
D.
6 units of output.
123.
Total Output
Total Fixed Cost
Total Variable Cost
Total Cost
0
$50
$0
$50
1
50
70
120
2
50
120
170
3
50
150
200
4
50
220
270
5
50
300
350
6
50
390
440
The accompanying table gives cost data for a firm that is selling in a purely competitive
market. Given the $75 product price, at its optimal output, the
firm will
124. In the short run, a purely competitive firm will earn a normal profit when
125.
Quantity Demanded
Price
Quantity Supplied
400,000
$5
800,000
500,000
4
700,000
600,000
3
600,000
700,000
2
500,000
800,000
1
400,000
The accompanying table applies to a purely competitive industry composed of 100 identical
firms. The equilibrium price in this purely competitive
market is
10–77
126.
Quantity Demanded
Price
Quantity Supplied
400,000
$5
800,000
500,000
4
700,000
600,000
3
600,000
700,000
2
500,000
800,000
1
400,000
The accompanying table applies to a purely competitive industry composed of 100 identical
firms. At the equilibrium price, each of the 100 firms in
this industry will produce
127.
Quantity Demanded
Price
Quantity Supplied
400,000
$5
800,000
500,000
4
700,000
600,000
3
600,000
700,000
2
500,000
800,000
1
400,000
The accompanying table applies to a purely competitive industry composed of 100 identical
firms. For each of the 100 firms in this industry, marginal
revenue and total revenue will be
128.
Quantity Demanded
Price
Quantity Supplied
400,000
$5
800,000
500,000
4
700,000
600,000
3
600,000
700,000
2
500,000
800,000
1
400,000
The accompanying table applies to a purely competitive industry composed of 100 identical
firms. If each of the 100 firms in the industry is
maximizing its profit, each must have a
marginal cost of
10–79
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Type: Table
129.
Quantity Demanded
Price
Quantity Supplied
400,000
$5
800,000
500,000
4
700,000
600,000
3
600,000
700,000
2
500,000
800,000
1
400,000
The accompanying table applies to a purely competitive industry composed of 100 identical
firms. If each of the 100 firms in the industry is
maximizing its profit and earning only a
normal profit, each must have a total cost of
130.
Quantity Demanded
Price
Quantity Supplied
400,000
$5
800,000
500,000
4
700,000
600,000
3
600,000
700,000
2
500,000
800,000
1
400,000
The accompanying table applies to a purely competitive industry composed of 100 identical
firms. If each of the 100 firms in the industry is
maximizing its profit and earning only a
normal profit, each must have an average total cost of
131.
(Consider This) An unprofitable motel will stay open in the short run if
132.
(Consider This) An otherwise unprofitable motel located on a largely abandoned roadway
might be able to stay open for several years by