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Figure 14-10 In the figure below, panel a) depicts the linear marginal cost of a firm in a competitive market, and panel b) depicts the linear market supply curve for a market with a fixed number of identical firms. Figure 14-10 In the figure below, panel a) depicts the linear marginal cost of a firm in a competitive market, and panel b) depicts the linear market supply curve for a market with a fixed number of identical firms. -Refer to Figure 14-10. If there are 700 identical firms in this market, what is the value of Q1? A) 140,000 B) 210,000 C) 280,000 D) 420,000 -Refer to Figure 14-10. If there are 700 identical firms in this market, what is the value of Q1?


A) 140,000
B) 210,000
C) 280,000
D) 420,000

E) A) and B)
F) None of the above

Correct Answer

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A profit-maximizing firm in a competitive market will decrease production when marginal cost exceeds average revenue.

A) True
B) False

Correct Answer

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Suppose that a firm in a competitive market is currently maximizing its short-run profit at an output of 50 units. If the current price is $9, the marginal cost of the 50th unit is $9, and the average total cost of producing 50 units is $4, what is the firm's profit?


A) $0
B) $200
C) $250
D) $450

E) B) and D)
F) B) and C)

Correct Answer

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