Answer to Question #52935 in Microeconomics for Yana

Question

multiple choice
1. In long-run equilibrium, a competitive firm produces the level of output at which:
a. marginal cost is at a minimum.
b. short - run average total cost and long-run average cost are at a minimum.
c. total revenue is at a maximum.
d. diseconomies of scale end.

2. Which of the following statements is true?
a. To maximize profits, a firm must maximize total revenue.
b. In long-run equilibrium, a competitive firm produces at the point of minimum average
total cost.
c. In the short-run, a perfectly competitive firm produces where total cost is minimum.
d. In the short-run, a perfectly competitive firm will close down whenever price is less than
average total cost.

Answer 1

1. In long-run equilibrium, a competitive firm produces the level of output at which:
b. short - run average total cost and long-run average cost are at a minimum.
2. Which of the following statements is¬ true?
b. In long-run equilibrium, a competitive firm produces at the point of minimum¬ average total cost.