In the short-run, a competitive firm is said to break-even if at equilibrium the:

In the short-run, a competitive firm is said to break-even if at equilibrium the:
 a. price is equal to marginal revenue.
  b. price is equal to average revenue.
  c. price is equal to average variable cost.
  d. price is equal to the average total cost.
  e. price is equal to marginal cost.

QUESTION 2

A monopoly firm is charging the price the market will bear at a level of output where MC equals 6 and is increasing, MR equals 9, and average variable cost equals 5 . To maximize profits, the firm should:
 a. increase both output and price.
 b. increase output but decrease the price.
  c. decrease output and increase the price.
  d. decrease both output and price.

QUESTION 3

Proponents of strategic trade policy contend that:
 a. government should tax domestic firms to generate greater revenues.
  b. government should encourage imports to prevent monopoly in the domestic market.
  c. government should provide subsidies to domestic firms with decreasing costs.
  d. government should discourage domestic firms with decreasing costs from continuing production.
  e. government should tax domestic import competing firms.

QUESTION 4

A fall in demand for a commodity in a perfectly competitive market will shift the long-run supply curve to the right.
  Indicate whether the statement is true or false

QUESTION 5

If a profit-maximizing, perfectly competitive firm is making only a normal profit in the short run, then the firm is in:
 a. disequilibrium.
  b. equilibrium where MR exceeds minimum ATC.
  c. equilibrium where MR equals minimum AVC.
  d. equilibrium where P = AFC.
  e. equilibrium where P = ATC

QUESTION 6

If an unregulated monopolist operates in a market, then:
 a. customers will pay higher prices than if the market were competitive.
 b. customers will purchase fewer units of output than if the market were competitive.
  c. society will not be allocating its resources efficiently.
 d. all of the above will occur.