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a.
$12.
b.
$4.
c.
$3.
d.
$1.
56. Refer to Table 14-2. For this firm, the marginal revenue from selling the 3rd unit is
a.
$12.
b.
$4.
c.
$3.
d.
$1.
Table 14-3
The table represents a demand curve faced by a firm in a competitive market.
Quantity
Total Revenue
0
$0
1
$13
2
$26
3
$39
4
$52
57. Refer to Table 14-3. For this firm, the price is
a.
$39.
b.
$26.
c.
$13.
d.
$0.
58. Refer to Table 14-3. For this firm, the marginal revenue is
a.
$39.
b.
$26.
c.
$13.
d.
$0.
59. Refer to Table 14-3. For this firm, the average revenue is
a.
$39.
b.
$26.
c.
$13.
d.
$0.
Table 14-4
The table represents a demand curve faced by a firm in a competitive market.
Quantity
Total Revenue
0
$0
1
$5
2
$10
3
$15
4
$20
60. Refer to Table 14-4. For this firm, the price is
a.
$0.
b.
$5.
c.
$10.
d.
$15.
61. Refer to Table 14-4. For this firm, the marginal revenue is
a.
$0.
b.
$5.
c.
$10.
d.
$15.
62. Refer to Table 14-4. For this firm, the average revenue is
a.
$0.
b.
$5.
c.
$10.
d.
$15.
Table 14-5
The table represents a demand curve faced by a firm in a competitive market.
Quantity
Total Revenue
12
$132
13
$143
14
$154
15
$165
16
$176
63. Refer to Table 14-5. For this firm, the price of the product is
a.
$9.
b.
$11.
c.
$13.
d.
$15.
64. Refer to Table 14-5. For this firm, the average revenue when 14 units are produced and sold is
a.
$9.
b.
$11.
c.
$13.
d.
$15.
65. Refer to Table 14-5. For this firm, the marginal revenue of the 12th unit is
a.
$9.
b.
$10.
c.
$11
d.
The marginal revenue cannot be determined without knowing the total revenue when 11 units are sold.
Table 14-6
The following table presents cost and revenue information for a firm operating in a competitive industry.
COSTS
REVENUES
Quantity
Produced
Total
Cost
Marginal
Cost
Quantity
Demanded
Price
Total
Revenue
Marginal
Revenue
0
$100
--
0
$120
--
1
$150
1
$120
2
$202
2
$120
3
$257
3
$120
4
$317
4
$120
5
$385
5
$120
6
$465
6
$120
7
$562
7
$120
8
$682
8
$120
66. Refer to Table 14-6. What is the total revenue from selling 7 units?
a.
$120
b.
$490
c.
$562
d.
$840
67. Refer to Table 14-6. What is the total revenue from selling 4 units?
a.
$120
b.
$257
c.
$317
d.
$480
68. Refer to Table 14-6. What is the marginal revenue from selling the 3rd unit?
a.
$55
b.
$120
c.
$137
d.
$140
69. Refer to Table 14-6. What is the average revenue when 4 units are sold?
a.
$60
b.
$120
c.
$125
d.
$197
70. Which of the following statements is correct?
a.
For all firms, marginal revenue equals the price of the good.
b.
Only for competitive firms does average revenue equal the price of the good.
c.
Marginal revenue can be calculated as total revenue divided by the quantity sold.
d.
Only for competitive firms does average revenue equal marginal revenue.
71. Suppose a firm in a competitive market earned $1,000 in total revenue and had a marginal revenue of $10 for the last
unit produced and sold. What is the average revenue per unit, and how many units were sold?
a.
$5 and 50 units
b.
$5 and 100 units
c.
$10 and 50 units
d.
$10 and 100 units
72. When a certain competitive firm produces and sells 100 units of output, marginal revenue is $80. When the same firm
produces and sells 200 units of output, what is average revenue?
a.
$40
b.
$80
c.
$160
d.
This cannot be determined from the given information.
73. Which of the following statements regarding a competitive firm is correct?
a.
Because demand is downward sloping, if a firm increases its level of output, the firm will have to charge a
lower price to sell the additional output.
b.
If a firm raises its price, the firm may be able to increase its total revenue even though it will sell fewer units.
c.
By lowering its price below the market price, the firm will benefit from selling more units at the lower price
than it could have sold by charging the market price.
d.
For all firms, average revenue equals the price of the good.
74. Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from
the sales. If the firm increases its output to 200 units, the average revenue of the 200th unit will be
a.
less than $12.
b.
more than $12.
c.
$12.
d.
Any of the above may be correct depending on the price elasticity of demand for the product.
75. Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in total revenue from
the sales. If the firm increases its output to 200 units, total revenue will be
a.
$2,000.
b.
$2,400.
c.
$4,200.
d.
We do not have enough information to answer the question.
76. Firms operating in competitive markets produce output levels where marginal revenue equals
a.
price.
b.
average revenue.
c.
total revenue divided by output.
d.
All of the above are correct.
77. For a competitive firm,
a.
total revenue equals average revenue.
b.
total revenue equals marginal revenue.
c.
total cost equals marginal revenue.
d.
average revenue equals marginal revenue.
78. Suppose that a firm operating in perfectly competitive market sells 100 units of output. Its total revenues from the sale
are $500. Which of the following statements is correct?
(i)
Marginal revenue equals $5.
(ii)
Average revenue equals $5.
(iii)
Price equals $5.
a.
(i) only
b.
(iii) only
c.
(i) and (ii) only
d.
(i), (ii), and (iii)
79. Suppose that a firm operating in perfectly competitive market sells 50 units of output. Its total revenues from the sale
are $500. Which of the following statements is correct?
(i)
Marginal revenue equals $5.
(ii)
Average revenue equals $10.
(iii)
Price equals $15.
a.
(i) only
b.
(ii) only
c.
(i) and (ii) only
d.
(i), (ii), and (iii)
80. Suppose that a firm operating in perfectly competitive market sells 200 units of output at a price of $3 each. Which of
the following statements is correct?
(i)
Marginal revenue equals $3.
(ii)
Average revenue equals $600.
(iii)
Average revenue exceeds marginal revenue, but we don’t know by how much.
a.
(i) only
b.
(iii) only
c.
(i) and (ii) only
d.
(i), (ii), and (iii)
81. Suppose that a firm operating in perfectly competitive market sells 300 units of output at a price of $3 each. Which of
the following statements is correct?
(i)
Marginal revenue equals $3.
(ii)
Average revenue equals $100.
(iii)
Total revenue equals $300.
a.
(i) only
b.
(iii) only
c.
(i) and (ii) only
d.
(i), (ii), and (iii)
82. Suppose that a firm operating in perfectly competitive market sells 300 units of output at a price of $3 each. Which of
the following statements is correct?
(i)
Marginal revenue equals $3.
(ii)
Average revenue equals $3.
(iii)
Total revenue equals $900.
a.
(i) only
b.
(iii) only
c.
(i) and (ii) only
d.
(i), (ii), and (iii)
83. Suppose that a firm operating in perfectly competitive market sells 400 units of output at a price of $4 each. Which of
the following statements is correct?
(i)
Marginal revenue equals $4.
(ii)
Average revenue equals $100.
(iii)
Total revenue equals $1,600.
a.
(i) only
b.
(iii) only
c.
(i) and (iii) only
d.
(i), (ii), and (iii)
84. For a firm operating in a competitive industry, which of the following statements is not correct?
a.
Price equals average revenue.
b.
Price equals marginal revenue.
c.
Total revenue is constant.
d.
Marginal revenue is constant.
85. For a firm in a perfectly competitive market, the price of the good is always
a.
equal to marginal revenue.
b.
equal to total revenue.
c.
greater than average revenue.
d.
equal to the firm’s efficient scale of output.
86. Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8. What
would be the firm's total revenue if it instead produced and sold 4 units of output?
a.
$4
b.
$8
c.
$32
d.
$64
87. Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8. What
would be the firm's marginal revenue if it instead produced and sold 4 units of output?
a.
$2
b.
$8
c.
$32
d.
$64
88. Whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue
a.
increases if MR < ATC and decreases if MR > ATC.
b.
does not change.
c.
increases.
d.
decreases.
89. Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by
the typical firm in this market?
a.
less than $2.50
b.
more than $2.50
c.
exactly $2.50
d.
The marginal revenue cannot be determined without knowing the actual quantity sold by the typical firm.
90. For an individual firm operating in a competitive market, marginal revenue equals
a.
average revenue and the price for all levels of output.
b.
average revenue, which is greater than the price for all levels of output.
c.
average revenue, the price, and marginal cost for all levels of output.
d.
marginal cost, which is greater than average revenue for all levels of output.
91. If the market elasticity of demand for potatoes is -0.3 in a perfectly competitive market, then the individual farmer's
elasticity of demand
a.
will also be -0.3.
b.
depends on how large a crop the farmer produces.
c.
will range between -0.3 and -1.0.
d.
will be infinite.
92. Which of the following is not a characteristic of a perfectly competitive market?
a.
Firms are price takers.
b.
Individual firms are price setters.
c.
Firms are able to sell all of the output that they choose to produce.
d.
Firms produce identical goods.
93. Perfectly competitive markets are characterized by
a.
conditions that discourage new firms from entering the market.
b.
conditions that allow firms to determine how much they wish to produce, without influencing the market price.
c.
conditions that presume that each firm produces a unique product.
d.
conditions that force firms to advertise their product heavily, to compete with other producers.
94. Tom produces commemorative t-shirts in a competitive market. If Tom decides to decrease his output, this will
a.
increase his revenue, since the output decrease leads to a higher market price.
b.
increase his revenue, since Tom’s competitors will also decrease their output, so that price rises to offset the
drop in Tom’s output.
c.
decrease his revenue, since his output has decreased and the price remains the same.
d.
decrease his revenue, since the price does not rise sufficiently when output drops to offset the drop in Tom’s
output.
Table 14-16
The table represents the demand information for a firm in a competitive market.
Quantity
Total Revenue
8
$120
9
$135
10
$150
11
$165
12
$180
13
$195
95. Refer to Table 14-16. For this firm, the price is
a.
$120
b.
$10
c.
$15
d.
$5
96. Refer to Table 14-16. For this firm, marginal revenue at an output of 10 units is
a.
$15.
b.
$150.
c.
$1500.
d.
$0.
97. Refer to Table 14-16. For this firm, when output is equal to 12 units, average revenue is
a.
$15.
b.
$150.
c.
always greater than marginal revenue.
d.
decreasing.
98. Consider a firm that operates in a perfectly competitive market. Currently the firm is producing 50 units of output and
at that output level, marginal revenue is $6. Suppose that the firm increases output by 50%. Total revenue will be
a.
$300.
b.
$450.
c.
$600.
d.
the same since price will fall by 50%.
