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61) A firm's efficient scale the quantity at which ________

Question : 61) A firm's efficient scale the quantity at which ________ : 1418023

 

 

61) A firm's efficient scale is the quantity at which ________ is a minimum.

A firm has excess capacity if it produces ________ its efficient scale.

In the long run, a firm in monopolistic competition produces less than the efficient scale and has excess capacity because the firm faces a ________ demand curve.

A) average total cost; below; downward-sloping

B) marginal cost; above; horizontal

C) average total cost; above; downward-sloping

D) marginal cost; below; horizontal

E) average variable cost; below; downward-sloping

 

Use the table below to answer the following question.

 

Table 14.2.1

 

Price

(dollars per sweatshirt)

Quantity demanded

(sweatshirts per week)

0

100

20

80

40

60

60

40

80

20

100

0

 

62) Refer to Table 14.2.1. Sara is a dot.com entrepreneur who sells sweatshirts. She pays $1,000 a week for her Web server and Internet connection. She pays the firm that makes the sweatshirts $20 a sweatshirt. Sara has no other costs. The table sets out the demand schedule for Sara's sweatshirts.

Other firms ________ enter the Web sweatshirt business and compete with Sara.

In the long run, the demand for Sara's sweatshirts ________ and her economic profit ________.

A) will; decreases; falls to zero

B) will not; decreases; falls to zero

C) will; increases; increases

D) will not; increases; increases

E) will; increases; falls to zero

 

63) Firms in monopolistic competition in the short run always

A) set price above marginal cost.

B) make an economic profit.

C) set price equal to marginal cost.

D) produce at the minimum average total cost.

E) break even.

64) The profit-maximizing condition for a firm in monopolistic competition is to produce the quantity at which

A) marginal cost equals price.

B) price equals marginal revenue.

C) average total cost equals price.

D) marginal cost equals marginal revenue.

E) average variable cost equals price.

 

65) In monopolistic competition, firms can make an economic profit in

A) the short run but not in the long run.

B) the short run and in the long run.

C) the long run but not in the short run.

D) neither the short run nor the long run.

E) always in the short run and sometimes but not frequently in the long run.

 

66) In long-run equilibrium, a firm in monopolistic competition

A) makes zero economic profit and operates with excess capacity.

B) makes zero economic profit and produces above capacity output.

C) makes a positive economic profit and operates with excess capacity.

D) makes a positive economic profit and produces above capacity output.

E) incurs an economic loss and exits the market.

 

 

 

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