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.Management Sciences
Category: Profit Maximizing Under Perfect Competition And Monopoly
Economic profits are ?
A. the difference between total revenue and total costs.
B. anything greater than the normal opportunity cost of investing
C. the opportunity costs of all inputs
D. a rate of profit that is just sufficient to keep owners and investors satisfied
A firm will shut down in the short run if ?
A. fixed costs exceed revenues.
B. it is suffering a loss.
C. variable costs exceed revenues
D. total costs exceed revenues
Suppose Handel’s Ice Cream experiences economies of scale up to a certain point and diseconomies of scale beyond that point. Its long-run average cost curve is most likely to be ?
A. downward sloping to the right
B. U-shaped
C. Horizontal
D. upward sloping to the right
A group of firms that gets together to make price and output decisions is called ?
A. a concentrated industry.
B. a cartel
C. price leadership
D. an oligopoly.
Diminishing marginal return implies ?
A. decreasing average fixed costs.
B. decreasing marginal costs.
C. decreasing average variable costs.
D. increasing marginal costs.
A normal rate of profit ?
A. Is the rate of return on investments over the interest rate on risk-free government bonds.
B. is the rate that is just sufficient to keep owners or investors satisfied.
C. is the difference between total revenue and total costs
D. is zero in a perfectly competitive industry.
A graph showing all the combinations capital and labor available for a given total cost is the ?
A. expenditure set
B. isocost line.
C. budget constraint
D. isoquant
Engineers for the All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases?
A. average costs to remain constant
B. average costs to decrease
C. average costs to increase
D. marginal costs to increase
When ________ substitutes exist, a monopolist has ________ power to raise price?
A. more; more
B. fewer; less
C. more; less
D. no; infinite
Maximum profit can be shown on a diagram using ?
A. the MR and MC curves
B. the AC and AR curves
C. the AC and MC curves
D. the MR and AR curves
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