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Chapter 14
Microeconomics (Đại học Hà Nội)
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Chapter 14/Firms in Competitive Markets  405
Chapt
er14
Fi
r
msi
nCompe
t
i
t
i
veMar
ke
t
s
MULTIPLECHOICE
1.
A mar
ke
ti
sc
ompe
t
i
t
i
vei
f
(
i
) fir
msha
vet
hefle
xi
bi
l
i
t
yt
opr
i
c
et
he
i
rownpr
oduc
t
.
(
i
i
) e
ac
hbuye
ri
ss
mal
lc
ompar
e
dt
ot
hemar
ke
t
.
(
i
i
i
)e
ac
hs
e
l
l
e
ri
ss
mal
lc
ompar
e
dt
ot
hemar
ke
t
.
a
.(
i
)and(
i
i
)onl
y
b.(
i
)and(
i
i
i
)onl
y
c
.(
i
i
)and(
i
i
i
)onl
y
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
(
i
i
)and(
i
i
i
)onl
y
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
2.
Whe
nafir
m hasl
i
t
t
l
eabi
l
i
t
yt
oi
nflue
nc
emar
ke
tpr
i
c
e
si
ti
ss
ai
dt
obei
nwha
tki
ndofamar
ke
t
?
a
. ac
ompe
t
i
t
i
vemar
ke
t
b.as
t
r
a
t
e
gi
cmar
ke
t
c
. at
hi
nmar
ke
t
d.apowe
rmar
ke
t
ANSWER:
a
.
ac
ompe
t
i
t
i
vemar
ke
t
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
3.
I
nac
ompe
t
i
t
i
vemar
ke
t
,
t
heac
t
i
onsofa
nys
i
ngl
ebuye
rors
e
l
l
e
rwi
l
l
a
. ha
veane
gl
i
gi
bl
ei
mpac
tont
hemar
ke
tpr
i
c
e
.
b.ha
vel
i
t
t
l
ee
ffe
c
tonove
r
al
lpr
oduc
t
i
onbutwi
l
lul
t
i
ma
t
e
l
yc
ha
ngefinalpr
oduc
tpr
i
c
e
.
c
.c
aus
eanot
i
c
e
abl
ec
hangei
nove
r
al
lpr
oduc
t
i
ona
ndac
hangei
nfinalpr
oduc
tpr
i
c
e
.
d.adve
r
s
e
l
yaffe
c
tt
hepr
ofit
abi
l
i
t
yofmor
et
hanonefir
mi
nt
hemar
ke
t
.
ANSWER:
a
.
ha
veane
gl
i
gi
bl
ei
mpac
tont
hemar
ke
tpr
i
c
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
Us
et
hei
nf
or
ma
t
i
oni
nt
het
abl
ebe
l
ow t
oans
we
rque
s
t
i
ons4t
hr
ough7
.
Quant
i
t
y
1
2
3
4
5
6
7
8
9
Pr
i
c
e
13
13
13
13
13
13
13
13
13
4.
Thepr
i
c
eandquant
i
t
yr
e
l
a
t
i
ons
hi
pi
nt
het
abl
ei
smos
tl
i
ke
l
yt
ha
tf
ac
e
dbyafir
mi
na
a
. monopol
y
.
b.c
onc
e
nt
r
a
t
e
dmar
ke
t
.
c
.c
ompe
t
i
t
i
vemar
ke
t
.
d.s
t
r
a
t
e
gi
cmar
ke
t
.
ANSWER:
c
.
c
ompe
t
i
t
i
vemar
ke
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
5.
Ove
rwhi
c
hr
a
ngeofout
puti
sa
ve
r
a
ger
e
ve
nuee
qualt
opr
i
c
e
?
a
. 1t
o5
b.3t
o7
c
. 5t
o9
d.Ave
r
a
ger
e
ve
nuei
se
qualt
opr
i
c
eove
rt
hewhol
er
angeofout
put
.
ANSWER:
d.
Ave
r
a
ger
e
ve
nuei
se
qualt
opr
i
c
eove
rt
hewhol
er
angeofout
put
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
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Chapter 14/Firms in Competitive Markets  406
6.
Ove
rwha
tr
angeofout
puti
smar
gi
nalr
e
ve
nuede
c
l
i
ni
ng?
a
. 1t
o6
b.3t
o7
c
. 7t
o9
d.None
;
mar
gi
nalr
e
ve
nuei
sc
ons
t
antove
rt
hewhol
er
angeofout
put
.
ANSWER:
d.
None
;
mar
gi
nalr
e
ve
nuei
sc
ons
t
antove
rt
hewhol
er
angeofout
put
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
7.
I
ft
hefir
m doubl
e
si
t
sout
putf
r
om 3t
o6uni
t
s
,t
ot
alr
e
ve
nuewi
l
l
a
.i
nc
r
e
as
ebyl
e
s
st
han$39.
b.i
nc
r
e
as
ebye
xac
t
l
y$39.
c
.i
nc
r
e
as
ebymor
et
han$39
.
d.I
tc
annotbede
t
e
r
mi
ne
df
r
om t
hei
nf
or
ma
t
i
onpr
ovi
de
d.
ANSWER:
b.
i
nc
r
e
as
ebye
xac
t
l
y$39.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
8.
Forafir
mi
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
t
,t
hepr
i
c
eoft
hegoodi
sal
wa
ys
a
.e
qualt
omar
gi
nalr
e
ve
nue
.
b.e
qualt
ot
ot
alr
e
ve
nue
.
c
. gr
e
a
t
e
rt
hana
ve
r
a
ger
e
ve
nue
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
e
qualt
omar
gi
nalr
e
ve
nue
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
9.
I
fafir
mi
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
tt
r
i
pl
e
st
henumbe
rofuni
t
sofout
puts
ol
d,
t
he
nt
ot
alr
e
ve
nuewi
l
l
a
. mor
et
hant
r
i
pl
e
.
b.l
e
s
st
hant
r
i
pl
e
.
c
.e
xac
t
l
yt
r
i
pl
e
.
d.Al
loft
heabovear
epot
e
nt
i
al
l
yt
r
ue
.
ANSWER:
c
.
e
xac
t
l
yt
r
i
pl
e
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
10. Be
c
aus
et
hegoodsoffe
r
e
df
ors
al
ei
nac
ompe
t
i
t
i
vemar
ke
tar
el
ar
ge
l
yt
hes
ame
,
a
.t
he
r
ewi
l
lbef
e
ws
e
l
l
e
r
si
nt
hemar
ke
t
.
b.t
he
r
ewi
l
lbef
e
w buye
r
si
nt
hemar
ke
t
.
c
. buye
r
swi
l
lha
vemar
ke
tpowe
r
.
d.s
e
l
l
e
r
swi
l
lha
vel
i
t
t
l
er
e
as
ont
oc
har
gel
e
s
st
hant
hegoi
ngmar
ke
tpr
i
c
e
.
ANSWER:
d.
s
e
l
l
e
r
swi
l
lha
vel
i
t
t
l
er
e
as
ont
oc
har
gel
e
s
st
hant
hegoi
ngmar
ke
tpr
i
c
e
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
11. Whi
c
hoft
hef
ol
l
owi
ngi
sNOTac
har
ac
t
e
r
i
s
t
i
cofape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
t
?
a
. Fi
r
msar
epr
i
c
et
ake
r
s
.
b.Fi
r
msha
vedi
ffic
ul
t
ye
nt
e
r
i
ngt
hemar
ke
t
.
c
. The
r
ear
emanys
e
l
l
e
r
si
nt
hemar
ke
t
.
d.Goodsoffe
r
e
df
ors
al
ear
el
ar
ge
l
yt
hes
ame
.
ANSWER:
b.
Fi
r
msha
vedi
ffic
ul
t
ye
nt
e
r
i
ngt
hemar
ke
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
12. Whe
nbuye
r
si
nac
ompe
t
i
t
i
vemar
ke
tt
aket
hes
e
l
l
i
ngpr
i
c
easgi
ve
n,t
he
yar
es
ai
dt
obe
a
. mar
ke
te
nt
r
ant
s
.
b.monopol
i
s
t
s
.
c
.f
r
e
er
i
de
r
s
.
d.pr
i
c
et
ake
r
s
.
ANSWER:
d.
pr
i
c
et
ake
r
s
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
13. Whe
nfir
msar
es
ai
dt
obepr
i
c
et
ake
r
s
,
i
ti
mpl
i
e
st
ha
ti
fafir
mr
ai
s
e
si
t
spr
i
c
e
,
a
. buye
r
swi
l
lgoe
l
s
e
whe
r
e
.
b.buye
r
swi
l
lpa
yt
hehi
ghe
rpr
i
c
ei
nt
hes
hor
tr
un.
c
.c
ompe
t
i
t
or
swi
l
lal
s
or
ai
s
et
he
i
rpr
i
c
e
s
.
d.fir
msi
nt
hei
ndus
t
r
ywi
l
le
x
e
r
c
i
s
emar
ke
tpowe
r
.
ANSWER:
a
.
buye
r
swi
l
lgoe
l
s
e
whe
r
e
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
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lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  407
14. Whi
c
hoft
hef
ol
l
owi
ngs
t
a
t
e
me
nt
sbe
s
tr
e
fle
c
t
sapr
i
c
e
t
aki
ngfir
m?
a
.I
ft
hefir
m we
r
et
oc
har
gemor
et
hant
hegoi
ngpr
i
c
e
,i
twoul
ds
e
l
lnoneofi
t
sgoods
.
b.Thefir
m hasnoi
nc
e
nt
i
vet
oc
har
gel
e
s
st
hant
hegoi
ngpr
i
c
e
.
c
. Thefir
mc
ans
e
l
lasmuc
hasi
twant
st
os
e
l
la
tt
hegoi
ngpr
i
c
e
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
15. I
nac
ompe
t
i
t
i
vemar
ke
t
,
nos
i
ngl
epr
oduc
e
rc
ani
nflue
nc
et
hemar
ke
tpr
i
c
ebe
c
aus
e
a
. manyot
he
rs
e
l
l
e
r
sar
eoffe
r
i
ngapr
oduc
tt
ha
ti
se
s
s
e
nt
i
al
l
yi
de
nt
i
c
al
.
b.c
ons
ume
r
sha
vemor
ei
nflue
nc
eove
rt
hemar
ke
tpr
i
c
et
hanpr
oduc
e
r
sdo.
c
. gove
r
nme
nti
nt
e
r
ve
nt
i
onpr
e
ve
nt
sfir
msf
r
om i
nflue
nc
i
ngpr
i
c
e
.
d.pr
oduc
e
r
sa
gr
e
enott
oc
hanget
hepr
i
c
e
.
ANSWER:
a
.
manyot
he
rs
e
l
l
e
r
sar
eoffe
r
i
ngapr
oduc
tt
ha
ti
se
s
s
e
nt
i
al
l
yi
de
nt
i
c
al
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
16. A c
ompe
t
i
t
i
vefir
m mi
ghtc
hoos
et
os
e
ti
t
spr
i
c
ebe
l
ow t
hemar
ke
tpr
i
c
e
,be
c
aus
e
a
.t
hi
swoul
dr
e
s
ul
ti
nhi
ghe
ra
ve
r
a
ger
e
ve
nue
.
b.t
hi
swoul
dr
e
s
ul
ti
nhi
ghe
rpr
ofit
s
.
c
.t
hi
swoul
dr
e
s
ul
ti
nl
owe
rt
ot
alc
os
t
s
.
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Noneoft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
17. Oft
hef
ol
l
owi
ngc
har
ac
t
e
r
i
s
t
i
c
sofc
ompe
t
i
t
i
vemar
ke
t
s
,
whi
c
har
ene
c
e
s
s
ar
yf
orfir
mst
obepr
i
c
et
ake
r
s
?
(
i
) The
r
ear
emanys
e
l
l
e
r
s
.
(
i
i
) Fi
r
msc
anf
r
e
e
l
ye
nt
e
rore
xi
tt
hemar
ke
t
.
(
i
i
i
) Goodsoffe
r
e
df
ors
al
ear
el
ar
ge
l
yt
hes
ame
.
a
.(
i
)and(
i
i
)onl
y
b.(
i
)and(
i
i
i
)onl
y
c
.(
i
i
)onl
y
d.Al
lar
ene
c
e
s
s
ar
y
.
ANSWER:
b.
(
i
)and(
i
i
i
)onl
y
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
18. Whe
nafir
mi
nac
ompe
t
i
t
i
vemar
ke
tpr
oduc
e
s10uni
t
sofout
put
,i
thasamar
gi
nalr
e
ve
nueof$8
.
00.
Wha
twoul
dbe
t
hefir
m’
st
ot
alr
e
ve
nuewhe
ni
tpr
oduc
e
s6uni
t
sofout
put
?
a
. $4.
80
b.$6.
00
c
. $48.
00
d.$60.
00
ANSWER:
c
.
$48.
00
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
19. Whe
nafir
mi
nac
ompe
t
i
t
i
vemar
ke
tr
e
c
e
i
ve
s$500i
nt
ot
alr
e
ve
nue
,i
thasamar
gi
nalr
e
ve
nueof$10
.Wha
ti
st
he
a
ve
r
a
ger
e
ve
nue
,andhow manyuni
t
swe
r
es
ol
d?
a
. $5and100
b.$10and50
c
. $10and100
d.Theans
we
rc
annotbede
t
e
r
mi
ne
df
r
om t
hei
nf
or
ma
t
i
ongi
ve
n.
ANSWER:
b.
$10and50
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
20. St
ar
t
i
ngf
r
om as
i
t
ua
t
i
oni
nwhi
c
hafir
mi
nac
ompe
t
i
t
i
vemar
ke
tpr
oduc
e
sands
e
l
l
s500doorknobsf
orapr
i
c
eof$10
pe
rdoor
knob
,whi
c
hoft
hef
ol
l
owi
nge
ve
nt
swoul
dde
c
r
e
as
et
hefir
m’
sa
ve
r
a
ger
e
ve
nue
?
a
. Thefir
mi
nc
r
e
as
e
si
t
sout
putabove500door
knobs
.
b.Thefir
m de
c
r
e
as
e
si
t
sout
putbe
l
ow 500door
knobs
.
c
. Themar
ke
tpr
i
c
eofdoor
knobsr
i
s
e
sabove$10
.
d.Themar
ke
tpr
i
c
eofdoor
knobsf
al
l
sbe
l
ow $10.
ANSWER:
d.
Themar
ke
tpr
i
c
eofdoorknobsf
al
l
sbe
l
ow $10
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  408
21. Whe
ne
ve
rape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vefir
mc
hoos
e
st
oc
ha
ngei
t
sl
e
ve
lofout
put
,hol
di
ngt
hepr
i
c
eoft
hepr
oduc
t
c
ons
t
ant
,
i
t
smar
gi
nalr
e
ve
nue
a
.i
nc
r
e
as
e
si
fMR<ATCandde
c
r
e
as
e
si
fMR>ATC.
b.doe
snotc
hange
.
c
.i
nc
r
e
as
e
s
.
d.de
c
r
e
as
e
s
.
ANSWER:
b.
doe
snotc
hange
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
22. I
fafir
mi
nac
ompe
t
i
t
i
vemar
ke
tr
e
duc
e
si
t
sout
putby20pe
r
c
e
nt
,
t
he
nasar
e
s
ul
tt
hepr
i
c
eofi
t
sout
puti
sl
i
ke
l
yt
o
a
.i
nc
r
e
as
e
.
b.r
e
mai
nunc
hange
d.
c
. de
c
r
e
as
ebyl
e
s
st
han20pe
r
c
e
nt
.
d.de
c
r
e
as
ebymor
et
han20pe
r
c
e
nt
.
ANSWER:
b.
r
e
mai
nunc
hange
d.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
23. Change
si
nt
heout
putofape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vefir
m,wi
t
houtanyc
hangei
nt
hepr
i
c
eoft
hepr
oduc
t
,
wi
l
lc
ha
nget
he
fir
m’
s
a
.t
ot
alr
e
ve
nue
.
b.mar
gi
nalr
e
ve
nue
.
c
.a
ve
r
a
ger
e
ve
nue
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
t
ot
alr
e
ve
nue
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
24. Whe
napr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
thasz
e
r
oe
c
onomi
cpr
ofit
,ac
c
ount
i
ngpr
ofit
a
.i
sne
ga
t
i
ve(
ac
c
ount
i
ngl
os
s
e
s
)
.
b.i
spos
i
t
i
ve
.
c
.i
sal
s
oze
r
o.
d.c
oul
dbepos
i
t
i
ve
,ne
ga
t
i
veorz
e
r
o.
ANSWER:
b.
i
spos
i
t
i
ve
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
25. Asage
ne
r
alr
ul
e
,whe
nac
c
ount
ant
sc
al
c
ul
a
t
epr
ofitt
he
yac
c
ountf
ore
xpl
i
c
i
tc
os
t
sbutus
ual
l
yi
gnor
e
a
.c
e
r
t
ai
nout
l
a
ysofmone
ybyt
hefir
m.
b.i
mpl
i
c
i
tc
os
t
s
.
c
. ope
r
a
t
i
ngc
os
t
s
.
d.fix
e
dc
os
t
s
.
ANSWER:
b.
i
mpl
i
c
i
tc
os
t
s
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
26. I
nc
al
c
ul
a
t
i
ngac
c
ount
i
ngpr
ofit
,
ac
c
ount
ant
st
ypi
c
al
l
ydon’
ti
nc
l
ude
a
.l
ongr
unc
os
t
s
.
b.s
unkc
os
t
s
.
c
.e
xpl
i
c
i
tc
os
t
sofpr
oduc
t
i
on.
d.oppor
t
uni
t
yc
os
t
st
ha
tdonoti
nvol
veanout
flow ofmone
y
.
ANSWER:
d.
oppor
t
uni
t
yc
os
t
st
ha
tdonoti
nvol
veanout
flow ofmone
y
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
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Chapter 14/Firms in Competitive Markets  409
Us
et
hef
ol
l
owi
ngi
nf
or
ma
t
i
ont
oans
we
rque
s
t
i
ons2
7t
hr
ough29
.
Aspar
tofane
s
t
a
t
es
e
t
t
l
e
me
ntMar
yr
e
c
e
i
ve
d$1mi
l
l
i
on.Shede
c
i
de
dt
ous
et
hemone
yt
opur
c
has
eas
mal
lbus
i
ne
s
si
n
Anywhe
r
e
,US
A.
I
fMar
ywoul
dha
vei
nve
s
t
e
dt
he$1mi
l
l
i
oni
nar
i
s
k
f
r
e
ebondf
unds
hec
oul
dha
vemade$100
,
000e
ac
h
ye
ar
.Sheal
s
oqui
the
rj
obwi
t
hLuc
ky
.
Com I
nc
.t
ode
vot
eal
lofhe
rt
i
met
ohe
rne
w bus
i
ne
s
s
;he
rs
al
ar
ya
tLuc
ky
.
Com I
nc
.
was$75,
000pe
rye
ar
.
27. Att
hee
ndoft
hefir
s
tye
arofope
r
a
t
i
nghe
rne
w bus
i
ne
s
s
,
Mar
y’
sac
c
ount
antr
e
por
t
e
danac
c
ount
i
ngpr
ofitof
$150,
000
.Wha
twasMar
y’
se
c
onomi
cpr
ofit
?
a
. $25,
000l
os
s
b.$50,
000l
os
s
c
. $25,
000pr
ofit
d.$150,
000pr
ofit
ANSWER:
a
.
$25,
000l
os
s
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
28. Wha
tar
eMar
y’
soppor
t
uni
t
yc
os
t
sofope
r
a
t
i
nghe
rne
w bus
i
ne
s
s
?
a
. $25,
000
b.$75,
000
c
. $100,
000
d.$175,
000
ANSWER:
d.
$175,
000
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
29. How l
ar
gewoul
dMar
y’
sac
c
ount
i
ngpr
ofit
sne
e
dt
obet
oal
l
ow he
rt
oa
t
t
ai
nze
r
oe
c
onomi
cpr
ofit
?
a
. $100,
000
b.$125,
000
c
. $175,
000
d.$225,
000
ANSWER:
c
.
$175,
000
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
30. TheWhe
e
l
e
rWhe
a
tFar
ms
e
l
l
swhe
a
tt
oagr
ai
nbr
oke
ri
nSe
a
t
t
l
e
,Was
hi
ngt
on.Si
nc
et
hemar
ke
tf
orwhe
a
ti
sge
ne
r
al
l
y
c
ons
i
de
r
e
dt
obec
ompe
t
i
t
i
ve
,t
heWhe
e
l
e
rFar
m doe
snot
a
.c
hoos
et
hequant
i
t
yofwhe
a
tt
opr
oduc
e
.
b.c
hoos
et
hepr
i
c
ea
twhi
c
hi
ts
e
l
l
si
t
swhe
a
t
.
c
. ha
veanyfix
e
dc
os
t
sofpr
oduc
t
i
on.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
c
hoos
et
hepr
i
c
ea
twhi
c
hi
ts
e
l
l
si
t
swhe
a
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
31. I
nac
ompe
t
i
t
i
vemar
ke
t
,
a
. nos
i
ngl
ebuye
rors
e
l
l
e
rc
ani
nflue
nc
et
hepr
i
c
eoft
hepr
oduc
t
.
b.t
he
r
ei
sas
mal
lnumbe
rofs
e
l
l
e
r
s
.
c
.t
hegoodsoffe
r
e
dbyt
hedi
ffe
r
e
nts
e
l
l
e
r
sar
emar
ke
dl
ydi
ffe
r
e
nt
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
nos
i
ngl
ebuye
rors
e
l
l
e
rc
ani
nflue
nc
et
hepr
i
c
eoft
hepr
oduc
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
32. I
nac
ompe
t
i
t
i
vemar
ke
t
,
a
.e
ac
hs
e
l
l
e
rc
ans
e
l
lal
lhewant
st
os
e
l
la
tt
hegoi
ngpr
i
c
e
.
b.buye
r
sands
e
l
l
e
r
sar
epr
i
c
et
ake
r
s
.
c
.t
hegoodsoffe
r
e
dbyt
hedi
ffe
r
e
nts
e
l
l
e
r
sar
el
ar
ge
l
yt
hes
ame
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
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Chapter 14/Firms in Competitive Markets  410
33. I
fABCCompanys
e
l
l
si
t
spr
oduc
ti
nac
ompe
t
i
t
i
vemar
ke
t
,t
he
n
a
.t
hepr
i
c
eoft
ha
tpr
oduc
tde
pe
ndsont
hequant
i
t
yoft
hepr
oduc
tt
ha
tABCCompa
nypr
oduc
e
sands
e
l
l
s
.
b.ABCCompany’
st
ot
alr
e
ve
nuei
spr
opor
t
i
onalt
oi
t
squant
i
t
yofout
put
.
c
. ABCCompany’
st
ot
alc
os
ti
spr
opor
t
i
onalt
oi
t
squant
i
t
yofout
put
.
d.ABCCompany’
st
ot
alr
e
ve
nuei
se
qualt
oi
t
sa
ve
r
a
ger
e
ve
nue
.
ANSWER:
b.
ABCCompany’
st
ot
alr
e
ve
nuei
spr
opor
t
i
onalt
oi
t
squant
i
t
yofout
put
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:1.
41
34. Whi
c
hoft
hef
ol
l
owi
nge
xpr
e
s
s
i
onsi
sc
or
r
e
c
tf
orac
ompe
t
i
t
i
vefir
m?
a
. Pr
ofit=Tot
alr
e
ve
nue–Tot
alc
os
t
.
b.Mar
gi
nalr
e
ve
nue=(
Changei
nt
ot
alr
e
ve
nue
)
/(
Changei
nquant
i
t
yofout
put
)
.
c
. Ave
r
a
ger
e
ve
nue=Tot
alr
e
ve
nue
/Quant
i
t
yofout
put
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
35. Forac
ompe
t
i
t
i
vefir
m,
a
. Tot
alr
e
ve
nue=Ave
r
a
ger
e
ve
nue
.
b.Tot
alr
e
ve
nue=Mar
gi
nalr
e
ve
nue
.
c
. Tot
alc
os
t=Mar
gi
nalr
e
ve
nue
.
d.Ave
r
a
ger
e
ve
nue=Mar
gi
nalr
e
ve
nue
.
ANSWER:
d.
Ave
r
a
ger
e
ve
nue=Mar
gi
nalr
e
ve
nue
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
1
36. Forac
ompe
t
i
t
i
vefir
m,
a
.a
ve
r
a
ger
e
ve
nuee
qual
st
hepr
i
c
eoft
hegood,
butmar
gi
nalr
e
ve
nuei
sdi
ffe
r
e
nt
.
b.mar
gi
nalr
e
ve
nuee
qual
st
hepr
i
c
eoft
hegood,
buta
ve
r
a
ger
e
ve
nuei
sdi
ffe
r
e
nt
.
c
.a
ve
r
a
ger
e
ve
nuee
qual
smar
gi
nalr
e
ve
nue
,butt
hepr
i
c
eoft
hegoodi
sdi
ffe
r
e
nt
.
d.a
ve
r
a
ger
e
ve
nue
,mar
gi
nalr
e
ve
nue
,andt
hepr
i
c
eoft
hegoodar
eal
le
qualt
ooneanot
he
r
.
ANSWER:
d.
a
ve
r
a
ger
e
ve
nue
,mar
gi
nalr
e
ve
nue
,andt
hepr
i
c
eoft
hegoodar
eal
le
qualt
ooneanot
he
r
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
37. I
fac
ompe
t
i
t
i
vefir
mi
s(
i
)s
e
l
l
i
ng1,
000uni
t
sofi
t
spr
oduc
ta
tapr
i
c
eof$9pe
runi
tand(
i
i
)e
ar
ni
ngapos
i
t
i
vepr
ofit
,
t
he
n
a
.i
t
st
ot
alc
os
ti
sl
e
s
st
han$9,
000
.
b.i
t
smar
gi
nalr
e
ve
nuei
sl
e
s
st
han$9.
c
.i
t
sa
ve
r
a
ger
e
ve
nuei
sgr
e
a
t
e
rt
han$9
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
i
t
st
ot
alc
os
ti
sl
e
s
st
han$9,
000
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
38. Whe
nac
ompe
t
i
t
i
vefir
mt
r
i
pl
e
st
heamountofout
puti
ts
e
l
l
s
,
a
.i
t
st
ot
alr
e
ve
nuet
r
i
pl
e
s
.
b.i
t
sa
ve
r
a
ger
e
ve
nuet
r
i
pl
e
s
.
c
.i
t
smar
gi
nalr
e
ve
nuet
r
i
pl
e
s
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
i
t
st
ot
alr
e
ve
nuet
r
i
pl
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1
39. Tot
alpr
ofitf
orafir
mi
sc
al
c
ul
a
t
e
dby
a
. mar
gi
nalr
e
ve
nuemi
nusa
ve
r
a
gec
os
t
.
b.a
ve
r
a
ger
e
ve
nuemi
nusa
ve
r
a
gec
os
t
.
c
. mar
gi
nalr
e
ve
nuemi
nusmar
gi
nalc
os
t
.
d.t
ot
alr
e
ve
nuemi
nust
ot
alc
os
t
.
ANSWER:
d.
t
ot
alr
e
ve
nuemi
nust
ot
alc
os
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  411
Us
et
hei
nf
or
ma
t
i
onf
orac
ompe
t
i
t
i
vefir
mi
nt
het
abl
ebe
l
ow t
oans
we
rque
s
t
i
ons40t
hr
ough45.
Quant
i
t
y
0
1
2
3
4
5
6
7
8
9
Tot
alRe
ve
nue
$0
9
18
27
36
45
54
63
72
81
Tot
alCos
t
$10
14
19
25
32
40
49
59
70
82
40. Atapr
oduc
t
i
onl
e
ve
lof4uni
t
swhi
c
hoft
hef
ol
l
owi
ngi
st
r
ue
?
a
. Mar
gi
nalc
os
ti
s$6
.
b.Tot
alr
e
ve
nuei
sgr
e
a
t
e
rt
hanvar
i
abl
ec
os
t
.
c
. Mar
gi
nalr
e
ve
nuei
sl
e
s
st
hanmar
gi
nalc
os
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
Tot
alr
e
ve
nuei
sgr
e
a
t
e
rt
hanvar
i
abl
ec
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
41. Atwhi
c
hquant
i
t
yofout
puti
smar
gi
nalr
e
ve
nuee
qualt
omar
gi
nalc
os
t
?
a
.3
b.6
c
.8
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
6
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
42. I
ft
hi
sfir
mc
hoos
e
st
omaxi
mi
zepr
ofiti
twi
l
lc
hoos
eal
e
ve
lofout
putwhe
r
emar
gi
nalc
os
ti
se
qualt
o
a
. 6.
b.7.
c
. 8.
d.9.
ANSWER:
d.
9.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
43. Themaxi
mum pr
ofita
vai
l
abl
et
ot
hi
sfir
mi
s
a
. $5.
b.$4.
c
. $3.
d.$2.
ANSWER:
a
.
$5.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
44. I
ft
hefir
m findst
ha
ti
t
smar
gi
nalc
os
ti
s$11
,i
ts
houl
d
a
.i
nc
r
e
as
epr
oduc
t
i
ont
omaxi
mi
zepr
ofit
.
b.i
nc
r
e
as
et
hepr
i
c
eoft
hepr
oduc
tt
omaxi
mi
zepr
ofit
.
c
. adve
r
t
i
s
et
oa
t
t
r
ac
taddi
t
i
onalbuye
r
st
omaxi
mi
z
epr
ofit
.
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Noneoft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
45. I
ft
hefir
m findst
ha
ti
t
smar
gi
nalc
os
ti
s$5
,i
ts
houl
d
a
.r
e
duc
efix
e
dc
os
t
sbyl
owe
r
i
ngpr
oduc
t
i
on.
b.i
nc
r
e
as
epr
oduc
t
i
ont
omaxi
mi
zepr
ofit
.
c
. de
c
r
e
as
epr
oduc
t
i
ont
omaxi
mi
zepr
ofit
.
d.mai
nt
ai
ni
t
sc
ur
r
e
ntl
e
ve
lofpr
oduc
t
i
ont
omaxi
mi
zepr
ofit
.
ANSWER:
b.
i
nc
r
e
as
epr
oduc
t
i
ont
omaxi
mi
zepr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  412
46. TheWhe
e
l
e
rWhe
a
tFar
ms
e
l
l
swhe
a
tt
oagr
ai
nbr
oke
ri
nSe
a
t
t
l
e
,Was
hi
ngt
on.Si
nc
et
hemar
ke
tf
orwhe
a
ti
sge
ne
r
al
l
y
c
ons
i
de
r
e
dt
obec
ompe
t
i
t
i
ve
,t
heWhe
e
l
e
rWhe
a
tFar
m maxi
mi
ze
si
t
spr
ofitbyc
hoos
i
ng
a
.t
opr
oduc
et
hequant
i
t
ya
twhi
c
ha
ve
r
a
get
ot
alc
os
ti
smi
ni
mi
ze
d.
b.t
opr
oduc
et
hequant
i
t
ya
twhi
c
ha
ve
r
a
gefix
e
dc
os
ti
smi
ni
mi
ze
d.
c
.t
os
e
l
li
t
swhe
a
ta
tapr
i
c
ewhe
r
emar
gi
nalc
os
ti
se
qualt
oa
ve
r
a
get
ot
alc
os
t
.
d.t
hequant
i
t
ya
twhi
c
hmar
ke
tpr
i
c
ei
se
qualt
ot
hef
a
r
m’
smar
gi
nalc
os
tofpr
oduc
t
i
on.
ANSWER:
d.
t
hequant
i
t
ya
twhi
c
hmar
ke
tpr
i
c
ei
se
qualt
ot
hef
a
r
m’
smar
gi
nalc
os
tofpr
oduc
t
i
on.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
47. Compar
i
s
onofmar
gi
nalr
e
ve
nuet
omar
gi
nalc
os
t
(
i
) r
e
ve
al
st
hec
ont
r
i
but
i
onoft
hel
as
tuni
tofpr
oduc
t
i
ont
ot
ot
alpr
ofit
.
(
i
i
) i
she
l
pf
uli
nmaki
ngpr
ofit
maxi
mi
zi
ngpr
oduc
t
i
onde
c
i
s
i
ons
.
(
i
i
i
)t
e
l
l
safir
m whe
t
he
ri
t
sfix
e
dc
os
t
sar
et
oohi
gh.
a
.(
i
)onl
y
b.(
i
)and(
i
i
)onl
y
c
.(
i
i
)and(
i
i
i
)onl
y
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
(
i
)and(
i
i
)onl
y
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
48. I
fmar
gi
nalc
os
te
x
c
e
e
dsmar
gi
nalr
e
ve
nue
,t
hefir
m
a
.i
smos
tl
i
ke
l
yt
obea
tapr
ofit
maxi
mi
zi
ngl
e
ve
lofout
put
.
b.s
houl
di
nc
r
e
as
et
hel
e
ve
lofpr
oduc
t
i
ont
omaxi
mi
zei
t
spr
ofit
.
c
. mus
tbee
xpe
r
i
e
nc
i
ngl
os
s
e
s
.
d.ma
ys
t
i
l
lbee
ar
ni
ngapr
ofit
.
ANSWER:
d.
ma
ys
t
i
l
lbee
ar
ni
ngapr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
49. Whe
nmar
gi
nalr
e
ve
nuee
qual
smar
gi
nalc
os
t
,t
hefir
m
a
.s
houl
di
nc
r
e
as
et
hel
e
ve
lofpr
oduc
t
i
ont
omaxi
mi
zei
t
spr
ofit
.
b.ma
ybemi
ni
mi
zi
ngi
t
sl
os
s
e
s
,r
a
t
he
rt
hanmaxi
mi
zi
ngi
t
spr
ofit
.
c
. mus
tbege
ne
r
a
t
i
nge
c
onomi
cpr
ofit
s
.
d.mus
tbege
ne
r
a
t
i
nge
c
onomi
cl
os
s
e
s
.
ANSWER:
b.
ma
ybemi
ni
mi
zi
ngi
t
sl
os
s
e
s
,r
a
t
he
rt
hanmaxi
mi
zi
ngi
t
spr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
50. Whe
nmana
ge
r
soffir
mst
hi
nka
tt
hemar
gi
nandmakei
nc
r
e
me
nt
aladj
us
t
me
nt
st
ot
hel
e
ve
lofpr
oduc
t
i
on,t
he
yar
e
na
t
ur
al
l
yl
e
dt
oal
e
ve
lofpr
oduc
t
i
onwhe
r
e
a
.a
ve
r
a
gevar
i
abl
ec
os
te
x
c
e
e
dsmar
gi
nalc
os
t
.
b.t
ot
alc
os
ti
sl
e
s
st
hana
ve
r
a
ger
e
ve
nue
.
c
.c
os
t
sar
emi
ni
mi
ze
d.
d.pr
ofiti
smaxi
mi
ze
d.
ANSWER:
d.
pr
ofiti
smaxi
mi
ze
d.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
51. Asage
ne
r
alr
ul
e
,pr
ofit
maxi
mi
zi
ngpr
oduc
e
r
si
nac
ompe
t
i
t
i
vemar
ke
tpr
oduc
eout
puta
tapoi
ntwhe
r
e
a
. mar
gi
nalc
os
ti
si
nc
r
e
as
i
ng.
b.mar
gi
nalc
os
ti
sde
c
r
e
as
i
ng.
c
. mar
gi
nalr
e
ve
nuei
si
nc
r
e
as
i
ng.
d.pr
i
c
ei
sl
e
s
st
hanmar
gi
nalr
e
ve
nue
.
ANSWER:
a
.
mar
gi
nalc
os
ti
si
nc
r
e
as
i
ng.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  413
Thegr
aphbe
l
ow de
pi
c
t
st
hec
os
ts
t
r
uc
t
ur
ef
orafir
mi
nac
ompe
t
i
t
i
vemar
ke
t
.
Us
et
hegr
apht
oans
we
rque
s
t
i
ons52
t
hr
ough55.
Not
e
:Ont
hea
bovedi
a
gr
am,c
hanget
heve
r
t
i
c
al
axi
sl
abe
l
sf
r
om MC1t
oP1,
MC2t
oP2,
e
t
c
.
52. Whe
npr
i
c
ei
se
qualt
oP3,
t
hepr
ofit
maxi
mi
zi
ngfir
m wi
l
lpr
oduc
ewha
tl
e
ve
lofout
put
?
a
. Q1
b.Q2
c
. Q3
d.Q4
ANSWER:
c
.
Q3
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
53. Whe
nmar
ke
tpr
i
c
ei
sa
tP2
,
afir
m pr
oduc
i
ngout
putl
e
ve
lQ1woul
de
xpe
r
i
e
nc
e
a
. pr
ofit
se
qualt
o(
P2–P1) Q1.
b.l
os
s
e
se
qualt
o(
P2–P1) Q1.
c
.l
os
s
e
sbe
c
aus
eP2<ATCa
tout
putl
e
ve
lQ1.
d.ze
r
opr
ofit
s
.
ANSWER:
c
.
l
os
s
e
sbe
c
aus
eP2<ATCa
tout
putl
e
ve
lQ1.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
54. Whe
nmar
ke
tpr
i
c
ei
sa
tP4,
apr
ofit
maxi
mi
zi
ngfir
m wi
l
lpr
oduc
ewha
tl
e
ve
lofout
put
?
a
. Q1
b.Q2
c
. Q3
d.Q4
ANSWER:
d.
Q4
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
55. Whe
nt
hepr
i
c
ei
sP2andt
hefir
m maxi
mi
ze
si
t
spr
ofitormi
ni
mi
ze
si
t
sl
os
s
,
t
hefir
m
a
.e
xpe
r
i
e
nc
e
sapos
i
t
i
vepr
ofit
.
b.e
xpe
r
i
e
nc
e
saze
r
opr
ofit
.
c
.e
xpe
r
i
e
nc
e
sal
os
s
,butc
ont
i
nue
st
oope
r
a
t
e
.
d.s
hut
sdown.
ANSWER:
b.
e
xpe
r
i
e
nc
e
saze
r
opr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  414
56. Whe
nc
al
c
ul
a
t
i
ngmar
gi
nalc
os
t
,
wha
tmus
tt
hefir
m know?
a
.s
unkc
os
t
b.var
i
abl
ec
os
t
c
. fix
e
dc
os
t
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
var
i
abl
ec
os
t
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
57. Theaddi
t
i
onalr
e
ve
nueafir
mi
nac
ompe
t
i
t
i
vemar
ke
tr
e
c
e
i
ve
si
fi
ti
nc
r
e
as
e
si
t
spr
oduc
t
i
onbyoneuni
te
qual
si
t
s
a
. mar
gi
nalr
e
ve
nue
.
b.a
ve
r
a
ger
e
ve
nue
.
c
. pr
i
c
epe
runi
tofout
put
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Thegr
aphbe
l
ow de
pi
c
t
st
hec
os
ts
t
r
uc
t
ur
ef
orafir
mi
nac
ompe
t
i
t
i
vemar
ke
t
.
Us
et
hegr
apht
oans
we
rque
s
t
i
ons58
t
hr
ough61.
58. Whe
npr
i
c
er
i
s
e
sf
r
om P2t
oP3,
t
hefir
m findst
ha
t
a
. mar
gi
nalc
os
te
x
c
e
e
dsmar
gi
nalr
e
ve
nuea
tapr
oduc
t
i
onl
e
ve
lofQ2.
b.i
fi
tpr
oduc
e
sa
tout
putl
e
ve
lQ3i
twi
l
le
ar
napos
i
t
i
vepr
ofit
.
c
.e
xpandi
ngout
putt
oQ4woul
dl
e
a
vet
hefir
m wi
t
hl
os
s
e
s
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
e
xpandi
ngout
putt
oQ4woul
dl
e
a
vet
hefir
m wi
t
hl
os
s
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
59. Whe
npr
i
c
ef
al
l
sf
r
om P3t
oP1,
t
hefir
m findst
ha
t
a
. fix
e
dc
os
ti
shi
ghe
ra
tapr
oduc
t
i
onl
e
ve
lofQ1t
hani
ti
sa
tQ3.
b.i
ts
houl
dpr
oduc
eQ1uni
t
sofout
put
.
c
.i
ts
houl
dpr
oduc
eQ3uni
t
sofout
put
.
d.i
ti
sunwi
l
l
i
ngt
opr
oduc
eanyout
put
.
ANSWER:
d.
i
ti
sunwi
l
l
i
ngt
opr
oduc
eanyout
put
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  415
60. Whe
npr
i
c
er
i
s
e
sf
r
om P3t
oP4,
t
hefir
m findst
ha
t
a
. fix
e
dc
os
t
sar
el
owe
ra
tapr
oduc
t
i
onl
e
ve
lofQ4.
b.i
tc
ane
ar
napos
i
t
i
vepr
ofitbyi
nc
r
e
as
i
ngpr
oduc
t
i
ont
oQ4.
c
. pr
ofiti
smaxi
mi
ze
da
tapr
oduc
t
i
onl
e
ve
lofQ3.
d.a
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsmar
gi
nalr
e
ve
nuea
tapr
oduc
t
i
onl
e
ve
lofQ4.
ANSWER:
b.
i
tc
ane
ar
napos
i
t
i
vepr
ofitbyi
nc
r
e
as
i
ngpr
oduc
t
i
ont
oQ4.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
61. Whi
c
hoft
hef
ol
l
owi
ngs
t
a
t
e
me
nt
sbe
s
tr
e
fle
c
t
st
hes
i
t
ua
t
i
onf
ac
e
dbyt
hefir
m whe
npr
i
c
ef
al
l
sf
r
om P4t
oP2?
a
. Ave
r
a
get
ot
alc
os
ti
sl
owe
rt
hana
tt
hepr
e
vi
ousl
e
ve
lofout
puts
oi
ti
nc
r
e
as
e
spr
oduc
t
i
on.
b.Thefir
m wi
l
le
ar
npr
ofite
qualt
o(
P4–P2) Q2.
c
. Mar
gi
nalr
e
ve
nuei
sl
owe
rt
hanmar
gi
nalc
os
ta
tt
hepr
e
vi
ousl
e
ve
lofout
put
,
s
oi
tde
c
r
e
as
e
spr
oduc
t
i
on.
d.Mar
gi
nalr
e
ve
nuei
shi
ghe
rt
hanmar
gi
nalc
os
ta
tt
hepr
e
vi
ousl
e
ve
lofout
put
,s
oi
ti
nc
r
e
as
e
spr
oduc
t
i
on.
ANSWER:
c
.
Mar
gi
nalr
e
ve
nuei
sl
owe
rt
hanmar
gi
nalc
os
ta
tt
hepr
e
vi
ousl
e
ve
lofout
put
,
s
oi
tde
c
r
e
as
e
spr
oduc
t
i
on.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
62. A pr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
lal
wa
ysmakemar
gi
naladj
us
t
me
nt
st
opr
oduc
t
i
onasl
ongas
a
.a
ve
r
a
ger
e
ve
nuei
sgr
e
a
t
e
rt
hana
ve
r
a
get
ot
alc
os
t
.
b.a
ve
r
a
ger
e
ve
nuei
se
qualt
omar
gi
nalc
os
t
.
c
. mar
gi
nalc
os
ti
sgr
e
a
t
e
rt
hana
ve
r
a
get
ot
alc
os
t
.
d.pr
i
c
ei
saboveorbe
l
ow mar
gi
nalc
os
t
.
ANSWER:
d.
pr
i
c
ei
saboveorbe
l
ow mar
gi
nalc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
63. Whe
npr
i
c
ei
sgr
e
a
t
e
rt
hanmar
gi
nalc
os
tf
orafir
mi
nac
ompe
t
i
t
i
vemar
ke
t
,
a
. mar
gi
nalc
os
tmus
tbef
al
l
i
ng.
b.t
hefir
m mus
tbemi
ni
mi
zi
ngi
t
sl
os
s
e
s
.
c
.t
he
r
ear
eoppor
t
uni
t
i
e
st
oi
nc
r
e
as
epr
ofitbyi
nc
r
e
as
i
ngpr
oduc
t
i
on.
d.t
hefir
ms
houl
dde
c
r
e
as
eout
putt
omaxi
mi
zepr
ofit
.
ANSWER:
c
.
t
he
r
ear
eoppor
t
uni
t
i
e
st
oi
nc
r
e
as
epr
ofitbyi
nc
r
e
as
i
ngpr
oduc
t
i
on.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
64. Thes
hor
t
r
uns
uppl
yc
ur
vef
orafir
mi
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
ti
s
a
.l
i
ke
l
yt
obehor
i
zont
al
.
b.l
i
ke
l
yt
os
l
opedownwar
d.
c
. de
t
e
r
mi
ne
dbyf
or
c
e
se
xt
e
r
nalt
ot
hefir
m.
d.i
t
smar
gi
nalc
os
tc
ur
ve(
abovea
ve
r
a
gevar
i
abl
ec
os
t
)
.
ANSWER:
d.
i
t
smar
gi
nalc
os
tc
ur
ve(
abovea
ve
r
a
gevar
i
abl
ec
os
t
)
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
65. Whe
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vefir
m make
sade
c
i
s
i
ont
os
hutdown,
i
ti
smos
tl
i
ke
l
yt
ha
t
a
. mar
gi
nalc
os
ti
sabovea
ve
r
a
gevar
i
abl
ec
os
t
.
b.mar
gi
nalc
os
ti
sabovea
ve
r
a
get
ot
alc
os
t
.
c
. pr
i
c
ei
sbe
l
ow t
hemi
ni
mum ofa
ve
r
a
gevar
i
abl
ec
os
t
.
d.fix
e
dc
os
t
se
x
c
e
e
dvar
i
abl
ec
os
t
s
.
ANSWER:
c
.
pr
i
c
ei
sbe
l
ow t
hemi
ni
mum ofa
ve
r
a
gevar
i
abl
ec
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
66. Whe
nafir
m make
sas
hor
t
r
unde
c
i
s
i
onnott
opr
oduc
ea
nyt
hi
ngdur
i
ngas
pe
c
i
fie
dpe
r
i
odoft
i
mebe
c
a
us
eof
c
ur
r
e
ntmar
ke
tc
ondi
t
i
ons
,t
hefir
mi
ss
ai
dt
o
a
.s
hutdown.
b.e
xi
t
.
c
. wi
t
hdr
a
w.
d.l
e
a
vet
hei
ndus
t
r
y
.
ANSWER:
a
.
s
hutdown.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  416
67. Fi
r
mst
ha
ts
hutdowni
nt
hes
hor
tr
uns
t
i
l
lha
vet
opa
yt
he
i
r
a
. var
i
abl
ec
os
t
s
.
b.fix
e
dc
os
t
s
.
c
.t
ot
alc
os
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
fix
e
dc
os
t
s
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
68. Whe
nt
ot
alr
e
ve
nuei
sl
e
s
st
hanvar
i
abl
ec
os
t
s
,afir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
l
a
.c
ont
i
nuet
oope
r
a
t
easl
ongasa
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsmar
gi
nalc
os
t
.
b.c
ont
i
nuet
oope
r
a
t
easl
ongasa
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsa
ve
r
a
gefix
e
dc
os
t
.
c
.s
hutdown.
d.al
wa
yse
xi
tt
hei
ndus
t
r
y
.
ANSWER:
c
.
s
hutdown.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
69. Whe
npr
i
c
ei
sbe
l
ow a
ve
r
a
gevar
i
abl
ec
os
t
,afir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
l
a
.s
hutdownandi
nc
urfix
e
dc
os
t
s
.
b.s
hutdownandi
nc
urbot
hvar
i
abl
eandfix
e
dc
os
t
s
.
c
.c
ont
i
nuet
oope
r
a
t
easl
ongasa
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsmar
gi
nalc
os
t
.
d.c
ont
i
nuet
oope
r
a
t
easl
ongasa
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsa
ve
r
a
gefix
e
dc
os
t
.
ANSWER:
a
.
s
hutdownandi
nc
urfix
e
dc
os
t
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
70. I
n1999
,s
he
e
phe
r
de
r
si
nt
hewe
s
t
e
r
nUni
t
e
dSt
a
t
e
ss
l
aught
e
r
e
d10
,
000s
he
e
pandbur
i
e
dt
he
mi
nl
ar
geope
npi
t
s
r
a
t
he
rt
hant
r
uc
kt
he
mt
ot
hemar
ke
tt
obes
ol
d.
Thi
sbe
ha
vi
ori
smos
tl
i
ke
l
ye
xpl
ai
ne
dby
a
.s
he
e
phe
r
de
r
smaki
ngas
hut
downde
c
i
s
i
ont
os
a
vet
hevar
i
abl
ec
os
toft
r
ans
por
t
i
ngs
he
e
pt
oas
l
aught
e
rhous
e
.
b.s
he
e
phe
r
de
r
smaki
ngane
xi
tde
c
i
s
i
ont
or
e
c
ove
rt
hefix
e
dc
os
tofr
ai
s
i
ngt
hes
he
e
p.
c
.t
her
i
s
i
ngmar
gi
nalc
os
tofpr
oduc
i
ngs
he
e
p.
d.i
r
r
a
t
i
onalbe
ha
vi
orofs
he
e
phe
r
de
r
s
.
ANSWER:
a
.
s
he
e
phe
r
de
r
smaki
ngas
hut
downde
c
i
s
i
ont
os
a
vet
hevar
i
abl
ec
os
toft
r
ans
por
t
i
ngs
he
e
pt
oas
l
aught
e
r
hous
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  417
Thefigur
ebe
l
ow de
pi
c
t
st
hec
os
ts
t
r
uc
t
ur
eofapr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
t
.
Us
et
hefigur
et
oans
we
r
que
s
t
i
ons71and72.
71. Whi
c
hl
i
nes
e
gme
ntbe
s
tr
e
fle
c
t
st
hes
hor
t
r
uns
uppl
yc
ur
vef
ort
hi
sfir
m?
a
. BCD
b.CD
c
. DE
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Noneoft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
72. I
ft
hefir
mi
si
nas
hor
t
r
unpos
i
t
i
onwhe
r
eP<AVC,i
ti
smos
tl
i
ke
l
yt
obeonwha
ts
e
gme
ntofi
t
ss
uppl
yc
ur
ve
?
a
. BC
b.CD
c
. DE
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Noneoft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
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Chapter 14/Firms in Competitive Markets  418
Thefigur
ebe
l
ow de
pi
c
t
st
hec
os
ts
t
r
uc
t
ur
eofapr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
t
.
Us
et
hefigur
et
oans
we
r
que
s
t
i
ons73and74.
73. Whi
c
hl
i
nes
e
gme
ntbe
s
tr
e
fle
c
t
st
hel
ongr
uns
uppl
yc
ur
vef
ort
hi
sfir
m?
a
. AB
b.BC
c
. CD
d.Noneoft
heabove
,t
hel
ongr
uns
uppl
yc
ur
ver
e
qui
r
e
sknowl
e
dgeoft
hea
ve
r
a
gevar
i
abl
ec
os
ts
t
r
uc
t
ur
e
.
ANSWER:
c
.
CD
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
74. Thi
sfir
m wi
l
le
xi
tt
hemar
ke
tf
ora
nypr
i
c
eont
hel
i
nes
e
gme
nt
a
. AB.
b.BC.
c
. CD.
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
AB.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
75. Whe
ne
c
onomi
s
t
sr
e
f
e
rt
oapr
oduc
t
i
onc
os
tt
ha
thasal
r
e
adybe
e
nc
ommi
t
t
e
dandc
annotber
e
c
ove
r
e
d,t
he
yus
et
he
t
e
r
m
a
.i
mpl
i
c
i
tc
os
t
.
b.e
xpl
i
c
i
tc
os
t
.
c
. var
i
abl
ec
os
t
.
d.s
unkc
os
t
.
ANSWER:
d.
s
unkc
os
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
76. A pr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
tpr
oduc
e
ss
mal
lr
ubbe
rbal
l
s
.Whe
nt
hemar
ke
tpr
i
c
ef
ors
mal
l
r
ubbe
rbal
l
sf
al
l
sbe
l
ow t
hemi
ni
mum ofi
t
sa
ve
r
a
get
ot
alc
os
t
,
buts
t
i
l
ll
i
e
sabovet
hemi
ni
mum ofa
ve
r
a
gevar
i
abl
e
c
os
t
,t
hefir
m
a
. wi
l
le
xpe
r
i
e
nc
el
os
s
e
sbuti
twi
l
lc
ont
i
nuet
opr
oduc
er
ubbe
rbal
l
s
.
b.wi
l
ls
hutdown.
c
. wi
l
lbee
ar
ni
ngbot
he
c
onomi
candac
c
ount
i
ngpr
ofit
s
.
d.s
houl
dr
ai
s
et
hepr
i
c
eofi
t
spr
oduc
t
.
ANSWER:
a
.
wi
l
le
xpe
r
i
e
nc
el
os
s
e
sbuti
twi
l
lc
ont
i
nuet
opr
oduc
er
ubbe
rbal
l
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
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Chapter 14/Firms in Competitive Markets  419
77. Whi
c
hoft
hef
ol
l
owi
ngs
t
a
t
e
me
nt
sbe
s
tr
e
fle
c
t
st
hepr
oduc
t
i
onde
c
i
s
i
onofapr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
ve
mar
ke
twhe
npr
i
c
ef
al
l
sbe
l
ow t
hemi
ni
mum ofa
ve
r
a
gevar
i
abl
ec
os
t
?
a
. Thefir
m wi
l
lc
ont
i
nuet
opr
oduc
et
oa
t
t
e
mptt
opa
yfix
e
dc
os
t
s
.
b.Thefir
m wi
l
li
mme
di
a
t
e
l
ys
t
oppr
oduc
t
i
ont
omi
ni
mi
zei
t
sl
os
s
e
s
.
c
. Thefir
m wi
l
ls
t
oppr
oduc
t
i
onass
oonasi
ti
sabl
et
opa
yi
t
ss
unkc
os
t
s
.
d.Thefir
m wi
l
lc
ont
i
nuet
opr
oduc
ei
nt
hes
hor
tr
unbutwi
l
ll
i
ke
l
ye
xi
tt
hemar
ke
ti
nt
hel
ongr
un.
ANSWER:
b.
Thefir
m wi
l
li
mme
di
a
t
e
l
ys
t
oppr
oduc
t
i
ont
omi
ni
mi
zei
t
sl
os
s
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
78. Whe
nfix
e
dc
os
t
sar
ei
gnor
e
dbe
c
aus
et
he
yar
ei
r
r
e
l
e
vantt
oabus
i
ne
s
s
’
spr
oduc
t
i
onde
c
i
s
i
on,t
he
yar
ec
al
l
e
d
a
.e
xpl
i
c
i
tc
os
t
s
.
b.i
mpl
i
c
i
tc
os
t
s
.
c
.s
unkc
os
t
s
.
d.oppor
t
uni
t
yc
os
t
s
.
ANSWER:
c
.
s
unkc
os
t
s
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
79. TheWhe
e
l
e
rWhe
a
tFar
m hasal
ongt
e
r
ml
e
as
eon5
,
000ac
r
e
sofl
andi
nSout
hDakot
a
.Theannuall
e
a
s
epa
yme
nti
s
$250,
000
.Pr
i
ort
opl
ant
i
ngi
nt
hes
pr
i
ngof2001
,t
heWhe
e
l
e
rFar
me
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onomi
s
tpr
e
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c
t
e
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ha
tt
heFar
m woul
dha
ve
$135,
000dol
l
ar
sl
e
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taf
t
e
rpa
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x
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e
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heannuall
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nt
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nt
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sc
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heWhe
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Far
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ont
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aus
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e
e
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ot
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oope
r
a
t
ee
ve
nt
houghi
tpr
e
di
c
t
sanac
c
ount
i
ngl
os
sof$115,
000
.
c
.s
hutdownande
xpe
r
i
e
nc
eanac
c
ount
i
ngl
os
sof$1
35
,
000.
d.e
xi
tt
hemar
ke
tande
xpe
r
i
e
nc
eanac
c
ount
i
ngl
os
sof$250
,
000.
ANSWER:
b.
c
ont
i
nuet
oope
r
a
t
ee
ve
nt
houghi
tpr
e
di
c
t
sanac
c
ount
i
ngl
os
sof$115,
000
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
80. Shr
i
mpGal
or
e
,
as
hr
i
mphar
ve
s
t
i
ngbus
i
ne
s
si
nt
hePac
i
ficNor
t
hwe
s
t
,hasa30
ye
arl
oanoni
t
ss
hr
i
mphar
ve
s
t
i
ng
boa
t
.
Theannuall
oanpa
yme
nti
s$25,
000andt
heboa
thasamar
ke
t(
s
al
va
ge
)val
uet
ha
te
x
c
e
e
dsi
t
sout
s
t
andi
ngl
oan
bal
anc
e
.
Pr
i
ort
ot
he2001s
hr
i
mphar
ve
s
t
i
ngs
e
as
on,Shr
i
mpGal
or
e
’
sac
c
ount
antpr
e
di
c
t
e
dt
ha
ta
te
xpe
c
t
e
dmar
ke
t
pr
i
c
e
sf
ors
hr
i
mp,Shr
i
mpGal
or
ewoul
dha
veane
tl
os
sof$75
,
000dol
l
ar
saf
t
e
rpa
yi
ngal
l2001e
xpe
ns
e
s(
i
nc
l
udi
ng
t
heannuall
oanpa
yme
nt
)
.I
nt
hi
sc
as
e
,
Shr
i
mpGal
or
es
houl
d
a
. pr
oduc
enot
hi
ngande
xpe
r
i
e
nc
eal
os
sof$25,
000
.
b.pr
oduc
enot
hi
ngande
xpe
r
i
e
nc
eal
os
sof$75,
000
.
c
.c
ont
i
nuet
oope
r
a
t
ebe
c
aus
ee
xpe
c
t
e
dpr
ofit
swi
l
lr
i
s
ei
nt
hef
ut
ur
e
.
d.c
ont
i
nuet
oope
r
a
t
ee
ve
nt
houghi
tpr
e
di
c
t
sal
os
sof$75
,
000.
ANSWER:
a
.
pr
oduc
enot
hi
ngande
xpe
r
i
e
nc
eal
os
sof$25,
000
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
81. A pr
ofit
maxi
mi
zi
ngfir
m wi
l
ls
hutdowni
nt
hes
hor
tr
unwhe
n
a
. pr
i
c
e<a
ve
r
a
gevar
i
abl
ec
os
t
.
b.pr
i
c
e<a
ve
r
a
get
ot
alc
os
t
.
c
.a
ve
r
a
ger
e
ve
nue>mar
gi
nalc
os
t
.
d.a
ve
r
a
ger
e
ve
nue>a
ve
r
a
gefix
e
dc
os
t
.
ANSWER:
a
.
pr
i
c
e<a
ve
r
a
gevar
i
abl
ec
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
82. Whe
napr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
ti
sunabl
et
oge
ne
r
a
t
ee
noughr
e
ve
nuet
opa
yal
lofi
t
sfix
e
d
c
os
t
si
ts
houl
d,i
nt
hes
hor
tr
un,
a
.s
hutdownandi
nc
ural
os
se
qualt
oi
t
sfix
e
dc
os
t
s
.
b.s
hutdownunt
i
li
ti
sa
bl
et
opr
oduc
ewhe
r
ea
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsa
ve
r
a
gefix
e
dc
os
t
.
c
.c
ont
i
nuet
opr
oduc
easl
ongasmar
gi
nalc
os
ti
sl
e
s
st
hana
ve
r
a
ger
e
ve
nue
.
d.c
ont
i
nuet
opr
oduc
easl
ongast
ot
alr
e
ve
nuei
ss
uffic
i
e
ntt
opa
yvar
i
abl
ec
os
t
s
.
ANSWER:
d.
c
ont
i
nuet
opr
oduc
easl
ongast
ot
alr
e
ve
nuei
ss
uffic
i
e
ntt
opa
yvar
i
abl
ec
os
t
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  420
83. I
nt
hel
ongr
unal
lofafir
m’
sc
os
t
sar
evar
i
abl
e
.I
nt
hi
sc
as
et
hee
xi
tc
r
i
t
e
r
i
onf
orapr
ofit
maxi
mi
zi
ngfir
mi
s
a
. pr
i
c
e<a
ve
r
a
get
ot
alc
os
t
.
b.pr
i
c
e>a
ve
r
a
get
ot
alc
os
t
.
c
.a
ve
r
a
ger
e
ve
nue>a
ve
r
a
gefix
e
dc
os
t
.
d.a
ve
r
a
ger
e
ve
nue>mar
gi
nalc
os
t
.
ANSWER:
a
.
pr
i
c
e<a
ve
r
a
get
ot
alc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
84. Whe
npr
ofit
maxi
mi
zi
ngfir
msi
nc
ompe
t
i
t
i
vemar
ke
t
sar
ee
ar
ni
ngpr
ofit
s
,
a
. mar
ke
tde
mandmus
te
x
c
e
e
dmar
ke
ts
uppl
ya
tt
hemar
ke
te
qui
l
i
br
i
um pr
i
c
e
.
b.mar
ke
ts
uppl
ymus
te
x
c
e
e
dmar
ke
tde
manda
tt
hemar
ke
te
qui
l
i
br
i
um pr
i
c
e
.
c
. ne
w fir
mswi
l
le
nt
e
rt
hemar
ke
t
.
d.t
hemos
ti
ne
ffic
i
e
ntfir
mswi
l
lbee
nc
our
a
ge
dt
ol
e
a
vet
hemar
ke
t
.
ANSWER:
c
.
ne
w fir
mswi
l
le
nt
e
rt
hemar
ke
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
85. Pr
ofit
maxi
mi
zi
ngfir
mse
nt
e
rac
ompe
t
i
t
i
vemar
ke
twhe
n,f
ore
xi
s
t
i
ngfir
msi
nt
ha
tmar
ke
t
,
a
.t
ot
alr
e
ve
nuee
x
c
e
e
dsfix
e
dc
os
t
s
.
b.t
ot
alr
e
ve
nuee
x
c
e
e
dst
ot
alvar
i
abl
ec
os
t
s
.
c
.a
ve
r
a
get
ot
alc
os
te
x
c
e
e
dsa
ve
r
a
ger
e
ve
nue
.
d.pr
i
c
ee
x
c
e
e
dsa
ve
r
a
get
ot
alc
os
t
.
ANSWER:
d.
pr
i
c
ee
x
c
e
e
dsa
ve
r
a
get
ot
alc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Thefigur
ebe
l
ow de
pi
c
t
st
hec
os
ts
t
r
uc
t
ur
eofafir
mi
nac
ompe
t
i
t
i
vemar
ke
t
.
Us
et
hefigur
et
oans
we
rque
s
t
i
ons86t
hr
ough
88.
86. Whe
nmar
ke
tpr
i
c
ei
sP5,
apr
ofit
maxi
mi
zi
ngfir
m’
spr
ofit
sc
anber
e
pr
e
s
e
nt
e
dbyt
hear
e
a
a
. P5 Q3.
b.(
P5–P3) Q2.
c
.(
P5–P4) Q3.
d.Whe
nmar
ke
tpr
i
c
ei
sP5t
he
r
ear
enopr
ofit
s
.
ANSWER:
c
.
(
P5–P4) Q3.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
87. Fi
r
mswoul
dbee
nc
our
a
ge
dt
oe
nt
e
rt
hi
smar
ke
tf
oral
lpr
i
c
e
st
ha
te
x
c
e
e
d
a
. P1.
b.P2.
c
. P3.
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
P3.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  421
88. Whe
nmar
ke
tpr
i
c
ei
sP2,
apr
ofit
maxi
mi
zi
ngfir
m’
sl
os
s
e
sc
anber
e
pr
e
s
e
nt
e
dbyt
hear
e
a
a
.(
P3–P2) Q2.
b.(
P2–P1) Q2.
c
. Atamar
ke
tpr
i
c
eofP2,
t
hefir
m doe
snotha
vel
os
s
e
s
.
d.Atamar
ke
tpr
i
c
eofP2t
hefir
m hasl
os
s
e
s
,butt
her
e
f
e
r
e
nc
epoi
nt
si
nt
hefigur
edon’
ti
de
nt
i
f
yt
hel
os
s
e
s
.
ANSWER:
d.
Atamar
ke
tpr
i
c
eofP2t
hefir
m hasl
os
s
e
s
,butt
her
e
f
e
r
e
nc
epoi
nt
si
nt
hefigur
edon’
ti
de
nt
i
f
yt
hel
os
s
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Thefigur
ebe
l
ow de
pi
c
t
st
hec
os
ts
t
r
uc
t
ur
eofafir
mi
nac
ompe
t
i
t
i
vemar
ke
t
.
Us
et
hefigur
et
oans
we
rque
s
t
i
ons89t
hr
ough
91.
89. Whe
nmar
ke
tpr
i
c
ei
sP1,
apr
ofit
maxi
mi
zi
ngfir
m’
st
ot
alr
e
ve
nuec
anber
e
pr
e
s
e
nt
e
dbyt
hear
e
a
a
. P1 Q2.
b.P2 Q2.
c
. P3 Q2.
d.P1 Q3.
ANSWER:
a
.
P1 Q2.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
90. Whe
nmar
ke
tpr
i
c
ei
sP4,
apr
ofit
maxi
mi
zi
ngfir
m’
st
ot
alc
os
tc
anber
e
pr
e
s
e
nt
e
dbyt
hear
e
a
a
. P4 Q1
b.P4 Q4
c
. P2 Q4
d.Tot
alc
os
t
sc
annotbede
t
e
r
mi
ne
df
r
om t
hei
nf
or
ma
t
i
oni
nt
hefigur
e
.
ANSWER:
c
.
P2 Q4
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
91. Whe
nmar
ke
tpr
i
c
ei
sP1,
apr
ofit
maxi
mi
zi
ngfir
m’
st
ot
alpr
ofitorl
os
sc
anber
e
pr
e
s
e
nt
e
dbywhi
c
har
e
a?
a
. P1 Q3;
pr
ofit
b.(
P3–P1) Q2;
l
os
s
c
.(
_P2–P1) Q1;
l
os
s
d.Wec
a
n’
tt
e
l
lbe
c
aus
ewedon’
tknow fix
e
dc
os
t
s
.
ANSWER:
b.
(
P3–P1) Q2;
l
os
s
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  422
92. Whe
napr
ofit
maxi
mi
zi
ngfir
mi
se
ar
ni
ngpr
ofit
s
,
t
hos
epr
ofit
sc
anbei
de
nt
i
fie
dby
a
. P Q.
b.(
MC–AVC) Q.
c
.(
P–ATC) Q.
d.(
P–AVC) Q.
ANSWER:
c
.
(
P–ATC) Q.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
93. Whe
napr
ofit
maxi
mi
zi
ngfir
m findsi
t
s
e
l
fmi
ni
mi
zi
ngl
os
s
e
sbe
c
aus
ei
ti
sunabl
et
oe
ar
napos
i
t
i
vepr
ofit
,t
hi
st
as
ki
s
ac
c
ompl
i
s
he
dbypr
oduc
i
ngt
hequant
i
t
ya
twhi
c
hpr
i
c
ei
se
qualt
o
a
.s
unkc
os
t
.
b.a
ve
r
a
gefix
e
dc
os
t
.
c
.a
ve
r
a
gevar
i
abl
ec
os
t
.
d.mar
gi
nalc
os
t
.
ANSWER:
d.
mar
gi
nalc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
94. Whe
napr
ofit
maxi
mi
zi
ngfir
m’
sfix
e
dc
os
t
sar
ec
ons
i
de
r
e
ds
unki
nt
hes
hor
tr
un,
t
he
nt
hefir
m
a
.c
ans
e
tpr
i
c
eabovemar
gi
nalc
os
t
.
b.mus
ts
e
tpr
i
c
ebe
l
ow a
ve
r
a
get
ot
alc
os
t
.
c
. wi
l
lne
ve
rs
how l
os
s
e
s
.
d.c
ans
af
e
l
yi
gnor
efix
e
dc
os
t
swhe
nde
c
i
di
nghow muc
hout
putt
opr
oduc
e
.
ANSWER:
d.
c
ans
af
e
l
yi
gnor
efix
e
dc
os
t
swhe
nde
c
i
di
nghow muc
hout
putt
opr
oduc
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
95. A fir
m’
ss
hor
t
r
uns
uppl
yc
ur
vei
spar
tofwhi
c
hoft
hef
ol
l
owi
ngc
ur
ve
s
?
a
. mar
gi
nalr
e
ve
nue
b.a
ve
r
a
gevar
i
abl
ec
os
t
c
.a
ve
r
a
get
ot
alc
os
t
d.mar
gi
nalc
os
t
ANSWER:
d.
mar
gi
nalc
os
t
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
96. Thei
r
r
e
l
e
vanc
eofs
unkc
os
t
si
sbe
s
tde
s
c
r
i
be
dbywhi
c
hoft
hef
ol
l
owi
ngbus
i
ne
s
sde
c
i
s
i
ons
?
a
. Ne
w ai
r
l
i
ne
se
nt
e
rt
hemar
ke
tande
ar
npr
ofit
s
.
b.Ai
r
l
i
ne
sc
ont
i
nuet
os
e
l
lt
i
c
ke
t
se
ve
nt
hought
he
yar
er
e
por
t
i
ngl
ar
gel
os
s
e
s
.
c
. Ai
r
l
i
ne
se
xi
tt
hemar
ke
twhe
nt
he
yr
e
por
tl
os
s
e
s
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
Ai
r
l
i
ne
sc
ont
i
nuet
os
e
l
lt
i
c
ke
t
se
ve
nt
hought
he
yar
er
e
por
t
i
ngl
ar
gel
os
s
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
97. I
fapr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
tdi
s
c
ove
r
st
ha
ta
ti
t
sc
ur
r
e
ntl
e
ve
lofpr
oduc
t
i
onpr
i
c
ei
sgr
e
a
t
e
r
t
hanmar
gi
nalc
os
ti
ts
houl
d
a
.s
hutdown.
b.r
e
duc
ei
t
sout
put
,butc
ont
i
nueope
r
a
t
i
ng.
c
. ke
e
pout
putt
hes
ame
.
d.i
nc
r
e
as
ei
t
sout
put
.
ANSWER:
d.
i
nc
r
e
as
ei
t
sout
put
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
98. Foranygi
ve
npr
i
c
e
,
afir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
lmaxi
mi
zepr
ofitbys
e
l
e
c
t
i
ngt
hel
e
ve
lofout
puta
twhi
c
h
pr
i
c
ei
nt
e
r
s
e
c
t
st
he
a
.a
ve
r
a
get
ot
alc
os
tc
ur
ve
.
b.a
ve
r
a
gevar
i
abl
ec
os
tc
ur
ve
.
c
. mar
gi
nalc
os
tc
ur
ve
.
d.mar
gi
nalr
e
ve
nuec
ur
ve
.
ANSWER:
c
.
mar
gi
nalc
os
tc
ur
ve
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
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Chapter 14/Firms in Competitive Markets  423
99. Byc
ompar
i
ngmar
gi
nalr
e
ve
nueandmar
gi
nalc
os
t
,afir
mi
nac
ompe
t
i
t
i
vemar
ke
ti
sabl
et
oadj
us
tpr
oduc
t
i
ont
ot
he
l
e
ve
lt
ha
ta
c
hi
e
ve
si
t
sobj
e
c
t
i
ve
,
whi
c
hweas
s
umet
obe
a
. maxi
mi
za
t
i
onoft
ot
alr
e
ve
nue
.
b.maxi
mi
za
t
i
onofpr
ofit
.
c
. mi
ni
mi
za
t
i
onofvar
i
abl
ec
os
t
.
d.mi
ni
mi
za
t
i
onofa
ve
r
a
get
ot
alc
os
t
.
ANSWER:
b.
maxi
mi
za
t
i
onofpr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
100. As
s
umet
ha
tSar
ahpl
ac
e
sa$70val
ueons
e
e
i
nghe
rc
ol
l
e
gef
oot
bal
lt
e
am pl
a
yi
nt
heRos
eBowl
.
Shepur
c
has
e
sa
t
i
c
ke
tt
ot
hegamef
or$50butwhe
ns
hear
r
i
ve
sa
tt
hegames
hedi
s
c
ove
r
st
ha
the
rt
i
c
ke
ti
smi
s
s
i
ng.
At
i
c
ke
ts
c
al
pe
r
out
s
i
det
hes
t
adi
um i
ss
e
l
l
i
ngt
i
c
ke
t
sf
or$65dol
l
ar
s
.I
fSar
ahpur
c
has
e
sat
i
c
ke
tf
r
om oneoft
hes
c
al
pe
r
sf
or$65
,s
he
i
sbe
s
tde
mons
t
r
a
t
i
ngt
hepr
i
nc
i
pl
et
ha
t
a
.s
unkc
os
t
sar
ei
r
r
e
l
e
vantt
omanype
r
s
onalde
c
i
s
i
ons
.
b.t
hepr
i
c
eoft
i
c
ke
t
sc
annotbee
xpl
ai
ne
dbye
c
onomi
cpr
i
nc
i
pl
e
s
.
c
.t
heas
s
umpt
i
onofr
a
t
i
onalbe
ha
vi
ordoe
snote
as
i
l
yappl
yt
ot
hepur
c
has
eofc
ol
l
e
gef
oot
bal
lgamet
i
c
ke
t
s
.
d.r
a
t
i
onalc
ons
ume
r
sdonotal
wa
ysr
e
s
pondt
oi
nc
e
nt
i
ve
s
.
ANSWER:
a
.
s
unkc
os
t
sar
ei
r
r
e
l
e
vantt
omanype
r
s
onalde
c
i
s
i
ons
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
101. Whe
nar
e
s
t
aur
ants
t
a
ysope
nf
orl
unc
hs
e
r
vi
c
ee
ve
nt
houghf
e
wc
us
t
ome
r
spa
t
r
oni
zet
her
e
s
t
aur
antf
orl
unc
h,whi
c
h
oft
hef
ol
l
owi
ngpr
i
nc
i
pl
e
si
s(
ar
e
)be
s
tde
mons
t
r
a
t
e
d?
(
i
) Fi
x
e
dc
os
t
sar
es
unki
nt
hes
hor
tr
un.
(
i
i
) I
nt
hes
hor
tr
un,onl
yfix
e
dc
os
t
sar
ei
mpor
t
antt
ot
hede
c
i
s
i
ont
os
t
a
yope
nf
orl
unc
h.
(
i
i
i
)I
fr
e
ve
nuee
x
c
e
e
dsvar
i
abl
ec
os
t
,
t
her
e
s
t
aur
antowne
ri
smaki
ngapr
ofit
abl
es
t
r
a
t
e
gi
cde
c
i
s
i
ont
or
e
mai
nope
n
f
orl
unc
h.
a
.(
i
)and(
i
i
)onl
y
b.(
i
i
)and(
i
i
i
)onl
y
c
.(
i
)and(
i
i
i
)onl
y
d.Al
lar
ede
mons
t
r
a
t
e
d.
ANSWER:
c
.
(
i
)and(
i
i
i
)onl
y
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
102. I
nt
hel
ongr
un,apr
ofit
maxi
mi
zi
ngfir
m wi
l
lc
hoos
et
oe
xi
tamar
ke
twhe
n
a
.a
ve
r
a
gefix
e
dc
os
ti
sf
al
l
i
ng.
b.var
i
abl
ec
os
t
se
x
c
e
e
ds
unkc
os
t
s
.
c
. mar
gi
nalc
os
te
x
c
e
e
dsmar
gi
nalr
e
ve
nuea
tt
hec
ur
r
e
ntl
e
ve
lofpr
oduc
t
i
on.
d.t
ot
alr
e
ve
nuei
sl
e
s
st
hant
ot
alc
os
t
.
ANSWER:
d.
t
ot
alr
e
ve
nuei
sl
e
s
st
hant
ot
alc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
103. Oneoft
hemos
ti
mpor
t
antde
t
e
r
mi
nant
soft
hes
uc
c
e
s
soff
r
e
e
mar
ke
tc
api
t
al
i
s
mi
s
a
.e
nl
i
ght
e
ne
dgove
r
nme
nt
ss
e
l
e
c
t
i
ngfir
mst
ha
ts
houl
dnotbeal
l
owe
dt
oe
xi
tamar
ke
t
.
b.f
r
e
ee
nt
r
yande
xi
ti
nmar
ke
t
s
.
c
. gove
r
nme
ntr
e
gul
a
t
i
onofmar
ke
tpar
t
i
c
i
pant
s
.
d.ha
vi
ngaf
e
wl
ar
gefir
msr
a
t
he
rt
hant
hous
andsofs
mal
lone
s
.
ANSWER:
b.
f
r
e
ee
nt
r
yande
xi
ti
nmar
ke
t
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
104. A pr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
ti
sc
ur
r
e
nt
l
ypr
oduc
i
ng100uni
t
sofout
put
.I
thasa
ve
r
a
ger
e
ve
nue
of$10
,andi
t
sa
ve
r
a
get
ot
alc
os
ti
s$8
.I
tf
ol
l
owst
ha
tt
hefir
m’
s
a
.a
ve
r
a
get
ot
alc
os
tc
ur
vei
nt
e
r
s
e
c
t
st
hemar
gi
nalc
os
tc
ur
vea
tanout
putl
e
ve
lofl
e
s
st
han100uni
t
s
.
b.a
ve
r
a
gevar
i
abl
ec
os
tc
ur
vei
nt
e
r
s
e
c
t
st
hemar
gi
nalc
os
tc
ur
vea
tanout
putl
e
ve
lofl
e
s
st
han100uni
t
s
.
c
. pr
ofiti
s$200.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  424
105. A pr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
ti
sabl
et
os
e
l
li
t
spr
oduc
tf
or$9.
Ati
t
sc
ur
r
e
ntl
e
ve
lofout
putt
he
fir
m’
sa
ve
r
a
get
ot
alc
os
ti
s$11.
I
t
smar
gi
nalc
os
tc
ur
vec
r
os
s
e
st
hemar
gi
nalr
e
ve
nuec
ur
vea
tanout
putl
e
ve
lof10
uni
t
s
.The
nt
hefir
me
xpe
r
i
e
nc
e
sa
a
. pr
ofitofmor
et
han$20.
b.pr
ofitofe
xac
t
l
y$20
.
c
.l
os
sofmor
et
han$20.
d.l
os
sofe
xac
t
l
y$20
.
ANSWER:
d.
l
os
sofe
xac
t
l
y$20
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
106. I
fac
ompe
t
i
t
i
vefir
mi
sc
ur
r
e
nt
l
ypr
oduc
i
ngal
e
ve
lofout
puta
twhi
c
hmar
gi
nalr
e
ve
nuee
x
c
e
e
dsma
r
gi
nalc
os
t
,
t
he
n
a
. aone
uni
ti
nc
r
e
as
ei
nout
putwi
l
li
nc
r
e
as
et
hefir
m’
spr
ofit
.
b.aone
uni
tde
c
r
e
as
ei
nout
putwi
l
li
nc
r
e
as
et
hefir
m’
spr
ofit
.
c
.t
ot
alr
e
ve
nuee
x
c
e
e
dst
ot
alc
os
t
.
d.t
ot
alc
os
te
x
c
e
e
dst
ot
alr
e
ve
nue
.
ANSWER:
a
.
aone
uni
ti
nc
r
e
as
ei
nout
putwi
l
li
nc
r
e
as
et
hefir
m’
spr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
107. I
fac
ompe
t
i
t
i
vefir
mi
sc
ur
r
e
nt
l
ypr
oduc
i
ngal
e
ve
lofout
puta
twhi
c
hmar
gi
nalc
os
te
x
c
e
e
dsmar
gi
nalr
e
ve
nue
,t
he
n
a
.a
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsmar
gi
nalc
os
t
.
b.t
hefir
mi
se
ar
ni
ngapos
i
t
i
vepr
ofit
.
c
. aone
uni
tde
c
r
e
as
ei
nout
putwoul
di
nc
r
e
as
et
hefir
m’
spr
ofit
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
aone
uni
tde
c
r
e
as
ei
nout
putwoul
di
nc
r
e
a
s
et
hefir
m’
spr
ofit
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
108. I
fac
ompe
t
i
t
i
vefir
mi
sc
ur
r
e
nt
l
ypr
oduc
i
ngal
e
ve
lofout
puta
twhi
c
hpr
ofiti
snotmaxi
mi
ze
d,t
he
ni
tmus
tbet
r
ue
t
ha
t
a
. mar
gi
nalr
e
ve
nuee
x
c
e
e
dsmar
gi
nalc
os
t
.
b.mar
gi
nalc
os
te
x
c
e
e
dsmar
gi
nalr
e
ve
nue
.
c
.t
ot
alc
os
te
x
c
e
e
dst
ot
alr
e
ve
nue
.
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Noneoft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
109. Att
hepr
ofit
maxi
mi
zi
ngl
e
ve
lofout
put
,
a
. mar
gi
nalr
e
ve
nue=a
ve
r
a
get
ot
alc
os
t
.
b.mar
gi
nalr
e
ve
nue=a
ve
r
a
gevar
i
abl
ec
os
t
.
c
. mar
gi
nalr
e
ve
nue=mar
gi
nalc
os
t
.
d.a
ve
r
a
ger
e
ve
nue=a
ve
r
a
get
ot
alc
os
t
.
ANSWER:
c
.
mar
gi
nalr
e
ve
nue=mar
gi
nalc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
110. Thei
nt
e
r
s
e
c
t
i
onofafir
m’
smar
gi
nalr
e
ve
nueandmar
gi
nalc
os
tc
ur
ve
sde
t
e
r
mi
ne
st
hel
e
ve
lofout
puta
twhi
c
h
a
.t
ot
alr
e
ve
nuei
se
qualt
ovar
i
abl
ec
os
t
.
b.t
ot
alr
e
ve
nuei
se
qualt
ofix
e
dc
os
t
.
c
.t
ot
alr
e
ve
nuei
se
qualt
ot
ot
alc
os
t
.
d.pr
ofiti
smaxi
mi
ze
d.
ANSWER:
d.
pr
ofiti
smaxi
mi
ze
d.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
111. Forac
e
r
t
ai
nfir
m,
t
he100t
huni
tofout
putt
ha
tt
hefir
m pr
oduc
e
shasamar
gi
nalr
e
ve
nueof$10andamar
gi
nalc
os
t
of$7
.I
tf
ol
l
owst
ha
t
a
.t
hepr
oduc
t
i
onoft
he100t
huni
tofout
puti
nc
r
e
a
s
e
st
hefir
m’
spr
ofitby$3.
b.t
hepr
oduc
t
i
onoft
he100t
huni
tofout
puti
nc
r
e
a
s
e
st
hefir
m’
sa
ve
r
a
get
ot
alc
os
tby$7
.
c
.t
hefir
m’
spr
ofit
maxi
mi
zi
ngl
e
ve
lofout
puti
sl
e
s
st
han100uni
t
s
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
t
hepr
oduc
t
i
onoft
he100t
huni
tofout
puti
nc
r
e
as
e
st
hefir
m’
spr
ofitby$3.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  425
112. A c
e
r
t
ai
nc
ompe
t
i
t
i
vefir
ms
e
l
l
si
t
sout
putf
or$20pe
runi
t
.The50t
huni
tofout
putt
ha
tt
hefir
m pr
oduc
e
shasa
mar
gi
nalc
os
tof$22
.I
tf
ol
l
owst
ha
tt
hepr
oduc
t
i
onoft
he50t
huni
tofout
put
a
.i
nc
r
e
as
e
st
hefir
m’
st
ot
alr
e
ve
nueby$20
.
b.i
nc
r
e
as
e
st
hefir
m’
st
ot
alc
os
tby$22
.
c
. de
c
r
e
as
e
st
hefir
m’
spr
ofitby$2.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Re
f
e
rt
ot
hef
ol
l
owi
ngi
nf
or
ma
t
i
ont
oans
we
rQue
s
t
i
ons113t
hr
ough116
.
As
s
umeac
e
r
t
ai
nfir
mi
spr
oduc
i
ng1,
000uni
t
sofout
put(
s
oQ =1,
000)
.AtQ =1,
000
,t
hefir
m’
smar
gi
nalc
os
te
qual
s$15
andi
t
sa
ve
r
a
get
ot
alc
os
te
qual
s$11
.Thefir
ms
e
l
l
si
t
sout
putf
or$12pe
runi
t
.
113. AtQ =1
,
000,
t
hefir
m’
spr
ofitamount
st
o
a
. $–200.
b.$1,
000
.
c
. $3,
000
.
d.$4,
000
.
ANSWER:
b.
$1,
000
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
114. AtQ =999
,t
hefir
m’
st
ot
alc
os
tamount
st
o
a
. $10,
985
.
b.$10,
990
.
c
. $10,
995
.
d.$10,
999
.
ANSWER:
a
.
$10,
985
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
115. AtQ =999
,t
hefir
m’
spr
ofitamount
st
o
a
. $993.
b.$997.
c
. $1,
003
.
d.$1,
007
.
ANSWER:
c
.
$1,
003
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
116. Tomaxi
mi
zei
t
spr
ofit
,t
hefir
ms
houl
d
a
.i
nc
r
e
as
ei
t
sout
put
.
b.c
ont
i
nuet
opr
oduc
e1
,
000uni
t
s
.
c
. de
c
r
e
as
ei
t
sout
put
,
butc
ont
i
nuet
opr
oduc
e
.
d.s
hutdown.
ANSWER:
c
.
de
c
r
e
as
ei
t
sout
put
,
butc
ont
i
nuet
opr
oduc
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
117. Whi
c
hoft
he
s
ec
ur
ve
si
st
hec
ompe
t
i
t
i
vefir
m’
ss
uppl
yc
ur
ve
?
a
.t
hea
ve
r
a
gevar
i
abl
ec
os
tc
ur
veabovemar
gi
nalc
os
t
b.t
hea
ve
r
a
get
ot
alc
os
tc
ur
veabovemar
gi
nalc
os
t
c
.t
hemar
gi
nalc
os
tc
ur
veabovea
ve
r
a
gevar
i
abl
ec
os
t
d.t
hea
ve
r
a
gefix
e
dc
os
tc
ur
ve
ANSWER:
c
.
t
hemar
gi
nalc
os
tc
ur
veabovea
ve
r
a
gevar
i
abl
ec
os
t
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
118. A c
ompe
t
i
t
i
vefir
m’
smar
gi
nalc
os
tc
ur
vei
sr
e
ga
r
de
dasi
t
ss
uppl
yc
ur
vebe
c
aus
e
a
.t
hepos
i
t
i
onoft
hemar
gi
nalc
os
tc
ur
vede
t
e
r
mi
ne
st
hepr
i
c
ef
orwhi
c
ht
hefir
ms
houl
ds
e
l
li
t
spr
oduc
t
.
b.amongt
hevar
i
ousc
os
tc
ur
ve
s
,
t
hemar
gi
nalc
os
tc
ur
vei
st
heonl
yonet
ha
ts
l
ope
supwar
d.
c
.t
hemar
gi
nalc
os
tc
ur
vede
t
e
r
mi
ne
st
hequant
i
t
yofout
putt
hefir
mi
swi
l
l
i
ngt
os
uppl
ya
tanypr
i
c
e
.
d.t
hefir
mi
sa
war
et
ha
tmar
gi
nalr
e
ve
nuemus
te
x
c
e
e
dmar
gi
nalc
os
ti
nor
de
rf
orpr
ofitt
obemaxi
mi
ze
d.
ANSWER:
c
.
t
hemar
gi
nalc
os
tc
ur
vede
t
e
r
mi
ne
st
hequa
nt
i
t
yofout
putt
hefir
mi
swi
l
l
i
ngt
os
uppl
ya
tanypr
i
c
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  426
119. Tobe
gi
n,ac
ompe
t
i
t
i
vefir
mi
ss
e
l
l
i
ngi
t
sout
putf
or$20pe
runi
tandi
ti
smaxi
mi
zi
ngi
t
spr
ofit
,whi
c
hi
spos
i
t
i
ve
.
Now,t
hepr
i
c
er
i
s
e
st
o$25andt
hefir
m make
swha
t
e
ve
radj
us
t
me
nt
sar
ene
c
e
s
s
ar
yt
omaxi
mi
zei
t
spr
ofita
tt
henowhi
ghe
rpr
i
c
e
.Onc
et
hefir
m hasadj
us
t
e
d,
whi
c
hoft
hef
ol
l
owi
ngs
t
a
t
e
me
nt
si
sc
or
r
e
c
t
?
a
. Thefir
m’
squant
i
t
yofout
puti
shi
ghe
rt
hani
twaspr
e
vi
ous
l
y
.
b.Thefir
m’
sa
ve
r
a
get
ot
alc
os
ti
shi
ghe
rt
hani
twa
spr
e
vi
ous
l
y
.
c
. Thefir
m’
sa
ve
r
a
ger
e
ve
nuei
shi
ghe
rt
hani
twaspr
e
vi
ous
l
y
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
120. Tobe
gi
n,ac
ompe
t
i
t
i
vefir
mi
ss
e
l
l
i
ngi
t
sout
putf
or$10pe
runi
tandi
ti
smaxi
mi
zi
ngi
t
spr
ofit
.Now,
t
hepr
i
c
er
i
s
e
s
t
o$14andt
hefir
m make
swha
t
e
ve
radj
us
t
me
nt
sar
ene
c
e
s
s
ar
yt
omaxi
mi
zei
t
spr
ofita
tt
henowhi
ghe
rpr
i
c
e
.
Onc
e
t
hefir
m hasadj
us
t
e
d,whi
c
hoft
hef
ol
l
owi
ngs
t
a
t
e
me
nt
si
sc
or
r
e
c
t
?
a
. Thefir
m’
smar
gi
nalr
e
ve
nuei
sl
owe
rt
hani
twaspr
e
vi
ous
l
y
.
b.Thefir
m’
smar
gi
nalc
os
ti
sl
owe
rt
hani
twaspr
e
vi
ous
l
y
.
c
. Thefir
m’
squant
i
t
yofout
puti
shi
ghe
rt
hani
twaspr
e
vi
ous
l
y
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
Thefir
m’
squant
i
t
yofout
puti
shi
ghe
rt
hani
twaspr
e
vi
ous
l
y
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
121. Whi
c
hoft
hef
ol
l
owi
ngs
t
a
t
e
me
nt
si
sc
or
r
e
c
tr
e
gar
di
ngafir
m’
sde
c
i
s
i
onmaki
ng?
a
. Thede
c
i
s
i
ont
os
hutdownandt
hede
c
i
s
i
ont
oe
xi
tar
ebot
hs
hor
t
r
unde
c
i
s
i
ons
.
b.Thede
c
i
s
i
ont
os
hutdownandt
hede
c
i
s
i
ont
oe
xi
tar
ebot
hl
ongr
unde
c
i
s
i
ons
.
c
. Thede
c
i
s
i
ont
os
hutdowni
sas
hor
t
r
unde
c
i
s
i
on,whe
r
e
ast
hede
c
i
s
i
ont
oe
xi
ti
sal
ongr
unde
c
i
s
i
on.
d.Thede
c
i
s
i
ont
oe
xi
ti
sas
hor
t
r
unde
c
i
s
i
on,whe
r
e
ast
hede
c
i
s
i
ont
os
hutdowni
sal
ongr
unde
c
i
s
i
on.
ANSWER:
c
.
Thede
c
i
s
i
ont
os
hutdowni
sas
hor
t
r
unde
c
i
s
i
on,whe
r
e
ast
hede
c
i
s
i
ont
oe
xi
ti
sal
ongr
unde
c
i
s
i
on.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
122. A fir
mt
ha
ts
hut
sdownt
e
mpor
ar
i
l
y
a
.s
t
i
l
lhast
opa
yi
t
svar
i
abl
ec
os
t
s
,
butnoti
t
sfix
e
dc
os
t
s
.
b.s
t
i
l
lhast
opa
yi
t
sfix
e
dc
os
t
s
,butnoti
t
svar
i
abl
ec
os
t
s
.
c
.s
t
i
l
lhast
opa
ybot
hi
t
svar
i
abl
ec
os
t
sandi
t
sfix
e
dc
os
t
s
.
d.hast
opa
yne
i
t
he
ri
t
svar
i
abl
ec
os
t
snori
t
sfix
e
dc
os
t
s
.
ANSWER:
b.
s
t
i
l
lhast
opa
yi
t
sfix
e
dc
os
t
s
,butnoti
t
svar
i
abl
ec
os
t
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
123. A fir
mt
ha
te
xi
t
si
t
smar
ke
t
a
.s
t
i
l
lhast
opa
yi
t
svar
i
abl
ec
os
t
s
,
butnoti
t
sfix
e
dc
os
t
s
.
b.s
t
i
l
lhast
opa
yi
t
sfix
e
dc
os
t
s
,butnoti
t
svar
i
abl
ec
os
t
s
.
c
.s
t
i
l
lhast
opa
ybot
hi
t
svar
i
abl
ec
os
t
sandi
t
sfix
e
dc
os
t
s
.
d.hast
opa
yne
i
t
he
ri
t
svar
i
abl
ec
os
t
snori
t
sfix
e
dc
os
t
s
.
ANSWER:
d.
hast
opa
yne
i
t
he
ri
t
svar
i
abl
ec
os
t
snori
t
sfix
e
dc
os
t
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
124. A fir
m wi
l
ls
hutdowni
nt
hes
hor
tr
uni
ft
het
ot
alr
e
ve
nuet
ha
ti
twoul
dge
tf
r
om pr
oduc
i
ngands
e
l
l
i
ngi
t
sout
puti
s
l
e
s
st
hani
t
s
a
. oppor
t
uni
t
yc
os
t
s
.
b.fix
e
dc
os
t
s
.
c
. var
i
abl
ec
os
t
s
.
d.t
ot
alc
os
t
s
.
ANSWER:
c
.
var
i
abl
ec
os
t
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
125. A fir
m wi
l
ls
hutdowni
nt
hes
hor
tr
uni
f
,
f
oral
lpos
i
t
i
vel
e
ve
l
sofout
put
,
a
.i
t
sl
os
se
x
c
e
e
dsi
t
sfix
e
dc
os
t
s
.
b.i
t
st
ot
alr
e
ve
nuei
sl
e
s
st
hani
t
svar
i
abl
ec
os
t
s
.
c
.t
hepr
i
c
eofi
t
spr
oduc
ti
sl
e
s
st
hani
t
sa
ve
r
a
gevar
i
abl
ec
os
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  427
126. A fir
m’
smar
gi
nalc
os
thasami
ni
mum val
ueof$2
;i
t
sa
ve
r
a
gevar
i
abl
ec
os
thasami
ni
mum val
ueof$4
;andi
t
s
a
ve
r
a
get
ot
alc
os
thasami
ni
mum val
ueof$5.
The
nt
hefir
m wi
l
ls
hutdowni
ft
hepr
i
c
eofi
t
spr
oduc
tf
al
l
sbe
l
ow
a
. $2.
b.$4.
c
. $5.
d.The
r
ei
snote
noughi
nf
or
ma
t
i
ongi
ve
nt
oans
we
rt
heque
s
t
i
on.
ANSWER:
b.
$4.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
127. Thec
ompl
e
t
ede
s
c
r
i
pt
i
onofac
ompe
t
i
t
i
vefir
m’
ss
uppl
yc
ur
vei
sasf
ol
l
ows
:Thec
ompe
t
i
t
i
vefir
m’
ss
hor
t
r
uns
uppl
y
c
ur
vei
st
ha
tpor
t
i
onoft
he
a
.a
ve
r
a
gevar
i
abl
ec
os
tc
ur
vet
ha
tl
i
e
sabovemar
gi
nalc
os
t
.
b.a
ve
r
a
get
ot
alc
os
tc
ur
vet
ha
tl
i
e
sabovemar
gi
nalc
os
t
.
c
. mar
gi
nalc
os
tc
ur
vet
ha
tl
i
e
sabovea
ve
r
a
gevar
i
abl
ec
os
t
.
d.mar
gi
nalc
os
tc
ur
vet
ha
tl
i
e
sabovea
ve
r
a
get
ot
alc
os
t
.
ANSWER:
c
.
mar
gi
nalc
os
tc
ur
vet
ha
tl
i
e
sabovea
ve
r
a
gevar
i
abl
ec
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
128. Thec
ompl
e
t
ede
s
c
r
i
pt
i
onofac
ompe
t
i
t
i
vefir
m’
ss
hor
t
r
uns
uppl
yc
ur
vei
sasf
ol
l
ows
:Thec
ompe
t
i
t
i
vefir
m’
ss
hor
t
r
uns
uppl
yc
ur
vei
st
ha
tpor
t
i
onoft
hemar
gi
nalc
os
tc
ur
vet
ha
tl
i
e
sabovea
ve
r
a
ge
a
. fix
e
dc
os
t
.
b.var
i
abl
ec
os
t
.
c
.t
ot
alc
os
t
.
d.r
e
ve
nue
.
ANSWER:
b.
var
i
abl
ec
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
129. Whi
c
hoft
he
s
et
ype
sofc
os
t
sc
anbei
gnor
e
dwhe
nani
ndi
vi
dualorafir
mi
smaki
ngde
c
i
s
i
ons
?
a
.s
unkc
os
t
s
b.mar
gi
nalc
os
t
s
c
. var
i
abl
ec
os
t
s
d.i
nf
or
ma
t
i
onc
os
t
s
ANSWER:
a
.
s
unkc
os
t
s
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
2
130. Suppos
eyouboughtat
i
c
ke
tt
oaf
oot
bal
lgamef
or$30,
andt
ha
tyoupl
ac
ea$35val
ueons
e
e
i
ngt
hegame
.I
fyoul
os
e
t
het
i
c
ke
t
,
t
he
nwha
ti
st
hemaxi
mum pr
i
c
eyous
houl
dpa
yf
oranot
he
rt
i
c
ke
t
?
a
. $30
b.$35
c
. $60
d.$65
ANSWER:
b.
$35
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
131. A fir
m wi
l
le
xi
tamar
ke
ti
f
,f
oral
lpos
i
t
i
vel
e
ve
l
sofout
put
,
a
.i
t
st
ot
alr
e
ve
nuei
sl
e
s
st
hani
t
st
ot
alc
os
t
.
b.i
t
spr
ofiti
sne
ga
t
i
ve
.
c
.t
hepr
i
c
eofi
t
spr
oduc
ti
sl
e
s
st
hani
t
sa
ve
r
a
get
ot
alc
os
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
132. Thec
ompe
t
i
t
i
vefir
m’
sl
ongr
uns
uppl
yc
ur
vei
st
ha
tpor
t
i
onoft
hemar
gi
nalc
os
tc
ur
vet
ha
tl
i
e
sabovea
ve
r
a
ge
a
. fix
e
dc
os
t
.
b.var
i
abl
ec
os
t
.
c
.t
ot
alc
os
t
.
d.r
e
ve
nue
.
ANSWER:
c
.
t
ot
alc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  428
133. Whi
c
hoft
hef
ol
l
owi
nge
xpr
e
s
s
i
onsi
sc
or
r
e
c
t
?
a
. Pr
ofit=(
Pr
i
c
eofout
put–Ave
r
a
get
ot
alc
os
t
) Quant
i
t
yofout
put
.
b.Pr
ofit=(
Pr
i
c
eofout
put Quant
i
t
yofout
put
)–Ave
r
a
get
ot
alc
os
t
.
c
. Pr
ofit=Tot
alr
e
ve
nue–(
Ave
r
a
get
ot
alc
os
t
/Quant
i
t
yofout
put
)
.
d.Pr
ofit=Tot
alr
e
ve
nue–(
Ave
r
a
gevar
i
abl
ec
os
t Quant
i
t
yofout
put
)
.
ANSWER:
a
.
Pr
ofit=(
Pr
i
c
eofout
put–Ave
r
a
get
ot
alc
os
t
) Quant
i
t
yofout
put
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
134. As
s
umeafir
mi
spr
oduc
i
ng800uni
t
sofout
put
,andi
ts
e
l
l
se
ac
huni
tf
or$6.
I
t
sa
ve
r
a
get
ot
alc
os
ti
s$4.
I
t
spr
ofiti
s
a
. $–1,
600
.
b.$1,
600
.
c
. $3,
200
.
d.$8,
000
.
ANSWER:
b.
$1,
600
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
2
135. Sus
anqui
the
rj
obasat
e
a
c
he
r
,whi
c
hpai
dhe
r$36,
000pe
rye
ari
nor
de
rt
os
t
ar
the
rownc
a
t
e
r
i
ngbus
i
ne
s
s
.Shes
pe
nt
$12,
000ofhe
rs
a
vi
ngs
,whi
c
hhadbe
e
ne
ar
ni
ng10pe
r
c
e
nti
nt
e
r
e
s
tpe
rye
ar
,one
qui
pme
ntf
orhe
rbus
i
ne
s
s
.Sheal
s
o
bor
r
owe
d$12,
000f
r
om he
rbanka
t10pe
r
c
e
nti
nt
e
r
e
s
t
,whi
c
hs
heal
s
os
pe
ntone
qui
pme
nt
.Fort
hepas
ts
e
ve
r
al
mont
hss
hehass
pe
nt$1,
000pe
rmont
honi
ngr
e
di
e
nt
sandot
he
rvar
i
abl
ec
os
t
s
.Al
s
of
ort
hepas
ts
e
ve
r
almont
hss
he
hast
ake
ni
n$3
,
500i
nmont
hl
yr
e
ve
nue
.
a
.I
nt
hes
hor
tr
un,Sus
ans
houl
ds
hutdownhe
rbus
i
ne
s
sandi
nt
hel
ongr
uns
hes
houl
de
xi
tt
hei
ndus
t
r
y
.
b.I
nt
hes
hor
tr
un,Sus
ans
houl
dc
ont
i
nuet
oope
r
a
t
ehe
rbus
i
ne
s
s
,buti
nt
hel
ongr
uns
hes
houl
de
xi
tt
hei
ndus
t
r
y
.
c
.I
nt
hes
hor
tr
un,Sus
ans
houl
dc
ont
i
nuet
oope
r
a
t
ehe
rbus
i
ne
s
s
,buti
nt
hel
ongr
uns
hewi
l
lpr
obabl
yf
ac
e
c
ompe
t
i
t
i
onf
r
om ne
wl
ye
nt
e
r
i
ngfir
ms
.
d.I
nt
hes
hor
tr
un,Sus
ans
houl
dc
ont
i
nuet
oope
r
a
t
ehe
rbus
i
ne
s
s
,ands
hei
sal
s
oi
nl
ongr
une
qui
l
i
br
i
um.
ANSWER:
b.
I
nt
hes
hor
tr
un,Sus
ans
houl
dc
ont
i
nuet
oope
r
a
t
ehe
rbus
i
ne
s
s
,buti
nt
hel
ongr
uns
hes
houl
de
xi
tt
he
i
ndus
t
r
y
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
136. A fir
mi
nac
ompe
t
i
t
i
vemar
ke
thast
hef
ol
l
owi
ngc
os
ts
t
r
uc
t
ur
e
:
Out
put
0
1
2
3
4
5
Tot
alCos
t
$5
$10
$12
$15
$24
$40
Thi
sfir
m wi
l
ls
hutdown
a
.i
fpr
i
c
ef
al
l
sbe
l
ow $3.
33ande
xi
ti
fi
tf
al
l
sbe
l
ow $5
.
b.i
fpr
i
c
ef
al
l
sbe
l
ow $5ande
xi
ti
fi
tf
al
l
sbe
l
ow $3.
33
.
c
.i
fpr
i
c
ef
al
l
sbe
l
ow $7ande
xi
ti
fi
tf
al
l
sbe
l
ow $10.
d.ande
xi
ti
fpr
i
c
ef
al
l
sbe
l
ow $5.
ANSWER:
a
.
i
fpr
i
c
ef
al
l
sbe
l
ow $3.
33ande
xi
ti
fi
tf
al
l
sbe
l
ow $5
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  429
137. A fir
mi
nac
ompe
t
i
t
i
vemar
ke
thast
hef
ol
l
owi
ngc
os
ts
t
r
uc
t
ur
e
:
Out
put
0
1
2
3
4
5
Tot
alCos
t
$5
$10
$12
$15
$24
$40
I
ft
hemar
ke
tpr
i
c
ei
s$4
,t
hi
sfir
m wi
l
l
a
. pr
oduc
et
wouni
t
si
nt
hes
hor
tr
unande
xi
ti
nt
hel
ongr
un.
b.pr
oduc
et
hr
e
euni
t
si
nt
hes
hor
tr
unande
xi
ti
nt
hel
ongr
un.
c
. pr
oduc
ef
ouruni
t
si
nt
hes
hor
tr
unande
xi
ti
nt
hel
ongr
un.
d.s
hutdowni
nt
hes
hor
tr
unande
xi
ti
nt
hel
ongr
un.
ANSWER:
b.
pr
oduc
et
hr
e
euni
t
si
nt
hes
hor
tr
unande
xi
ti
nt
hel
ongr
un.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
138. A c
ompe
t
i
t
i
vemar
ke
ti
si
nl
ongr
une
qui
l
i
br
i
um.I
fde
mandde
c
r
e
as
e
s
,wec
anbec
e
r
t
ai
nt
ha
tpr
i
c
ewi
l
l
a
.f
al
li
nt
hes
hor
tr
un.Al
lfir
mswi
l
ls
hutdownands
omeoft
he
m wi
l
le
xi
tt
hei
ndus
t
r
y
.Pr
i
c
ewi
l
lt
he
nr
i
s
e
.
b.f
al
li
nt
hes
hor
tr
un.Nofir
mswi
l
ls
hutdown,buts
omeoft
he
m wi
l
le
xi
tt
hei
ndus
t
r
y
.Pr
i
c
ewi
l
lt
he
nr
i
s
e
.
c
.f
al
li
nt
hes
hor
tr
un.Al
l
,
s
ome
,ornofir
mswi
l
ls
hutdown,ands
omeoft
he
m wi
l
le
xi
tt
hei
ndus
t
r
y
.Pr
i
c
ewi
l
l
t
he
nr
i
s
e
.
d.notf
al
li
nt
hes
hor
tr
unbe
c
aus
efir
mswi
l
le
xi
tt
omai
nt
ai
nt
hepr
i
c
e
.
ANSWER:
c
.
f
al
li
nt
hes
hor
tr
un.Al
l
,
s
omeornofir
mswi
l
ls
hutdown,
ands
omeoft
he
m wi
l
le
xi
tt
hei
ndus
t
r
y
.
Pr
i
c
e
wi
l
lt
he
nr
i
s
e
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
2
139. I
namar
ke
twi
t
h1,
000i
de
nt
i
c
alfir
ms
,
t
hes
hor
t
r
unmar
ke
ts
uppl
yi
st
he
a
. mar
gi
nalc
os
tc
ur
ve(
abovea
ve
r
a
gevar
i
abl
ec
os
t
)f
orat
ypi
c
alfir
mi
nt
hemar
ke
t
.
b.quant
i
t
ys
uppl
i
e
dbyt
het
ypi
c
alfir
mi
nt
hemar
ke
t
.
c
.s
um oft
hepr
i
c
e
sc
har
ge
dbye
ac
hoft
he1,
000i
ndi
vi
dualfir
ms
.
d.s
um oft
hequant
i
t
i
e
ss
uppl
i
e
dbye
ac
hoft
he1
,
000i
ndi
vi
dualfir
ms
.
ANSWER:
d.
s
um oft
hequant
i
t
i
e
ss
uppl
i
e
dbye
ac
hoft
he1
,
000i
ndi
vi
dualfir
ms
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
I
nt
hefigur
ebe
l
ow,
pane
l(
a)de
pi
c
t
st
hel
i
ne
arma
r
gi
nalc
os
tofafir
mi
nac
ompe
t
i
t
i
vemar
ke
tandpane
l(
b)de
pi
c
t
st
he
l
i
ne
armar
ke
ts
uppl
yc
ur
vef
oramar
ke
twi
t
hafix
e
dnumbe
rofi
de
nt
i
c
alfir
ms
.
Us
et
hefigur
et
oans
we
rque
s
t
i
ons140
t
hr
ough142.
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Chapter 14/Firms in Competitive Markets  430
140. I
ft
he
r
ear
e200i
de
nt
i
c
alfir
msi
nt
hi
smar
ke
t
,wha
tl
e
ve
lofout
putwi
l
lbes
uppl
i
e
dt
ot
hemar
ke
twhe
npr
i
c
ei
s$1
.
00?
a
. 2,
000
b.5,
000
c
. 10,
000
d.20,
000
ANSWER:
d.
20,
000
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
141. Whe
n100i
de
nt
i
c
alfir
mspar
t
i
c
i
pa
t
ei
nt
hi
smar
ke
t
,
a
twha
tpr
i
c
ewi
l
l15
,
000uni
t
sbes
uppl
i
e
dt
ot
hi
smar
ke
t
?
a
. $1.
00
b.$1.
50
c
. $2.
00
d.I
tc
annotbede
t
e
r
mi
ne
df
r
om t
hei
nf
or
ma
t
i
onpr
ovi
de
d.
ANSWER:
b.
$1.
50
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
142. I
fa
tamar
ke
tpr
i
c
eof$1
.
75,
52,
500uni
t
sofout
putar
es
uppl
i
e
dt
ot
hi
smar
ke
t
,
how manyi
de
nt
i
c
alfir
msar
e
par
t
i
c
i
pa
t
i
ngi
nt
hi
smar
ke
t
?
a
. 75
b.100
c
. 250
d.300
ANSWER:
d.
300
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
3
143. Whe
ne
xi
s
t
i
ngfir
msi
nac
ompe
t
i
t
i
vemar
ke
tar
epr
ofit
abl
e
,
ani
nc
e
nt
i
vee
xi
s
t
sf
or
a
. ne
w fir
mst
os
e
e
kgove
r
nme
nts
ubs
i
di
e
st
ha
twoul
dal
l
ow t
he
mt
oe
nt
e
rt
hemar
ke
t
.
b.ne
w fir
mst
oe
nt
e
rt
hemar
ke
t
,e
ve
nwi
t
houtgove
r
nme
nts
ubs
i
di
e
s
.
c
.e
xi
s
t
i
ngfir
mst
or
ai
s
epr
i
c
e
s
.
d.e
xi
s
t
i
ngfir
mst
oi
nc
r
e
as
epr
oduc
t
i
on.
ANSWER:
b.
ne
w fir
mst
oe
nt
e
rt
hemar
ke
t
,e
ve
nwi
t
houtgove
r
nme
nts
ubs
i
di
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
144. Whe
nne
w fir
msha
veani
nc
e
nt
i
vet
oe
nt
e
rac
ompe
t
i
t
i
vemar
ke
t
,t
he
i
re
nt
r
ywi
l
l
a
.i
nc
r
e
as
et
hepr
i
c
eoft
hepr
oduc
t
.
b.dr
i
vedownpr
ofit
sofe
xi
s
t
i
ngfir
msi
nt
hemar
ke
t
.
c
.s
hi
f
tt
hemar
ke
ts
uppl
yc
ur
vet
ot
hel
e
f
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
dr
i
vedownpr
ofit
sofe
xi
s
t
i
ngfir
msi
nt
hemar
ke
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
145. Whe
nfir
msha
veani
nc
e
nt
i
vet
oe
xi
tac
ompe
t
i
t
i
vemar
ke
t
,t
he
i
re
xi
twi
l
l
a
.l
owe
rmar
ke
tpr
i
c
e
.
b.ne
c
e
s
s
ar
i
l
yr
ai
s
et
hec
os
t
soffir
mst
ha
tr
e
mai
ni
nt
hemar
ke
t
.
c
.r
ai
s
epr
ofit
sf
orfir
mst
ha
tr
e
mai
ni
nt
hemar
ke
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
r
ai
s
epr
ofit
sf
orfir
mst
ha
tr
e
mai
ni
nt
hemar
ke
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
146. I
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
t
,t
hepr
oc
e
s
sofe
nt
r
yande
xi
twi
l
le
ndwhe
n,f
orfir
msi
nt
hemar
ke
t
,
a
. pr
i
c
ei
se
qualt
oa
ve
r
a
gevar
i
abl
ec
os
t
.
b.mar
gi
nalr
e
ve
nuei
se
qualt
oa
ve
r
a
gevar
i
abl
ec
os
t
.
c
.e
c
onomi
cpr
ofit
sar
eze
r
o.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
e
c
onomi
cpr
ofit
sar
eze
r
o.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
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Chapter 14/Firms in Competitive Markets  431
Us
et
hefigur
e
sbe
l
ow t
oans
we
rque
s
t
i
ons147and14
8.
147. I
ft
hefigur
ei
npane
l(
a)r
e
fle
c
t
st
hel
ongr
une
qui
l
i
br
i
um ofapr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
t
,t
he
figur
ei
npane
l(
b)i
smos
tl
i
ke
l
yt
or
e
fle
c
tl
ongr
unmar
ke
t
a
.s
t
r
a
t
e
gy
.
b.pr
oduc
t
i
onc
apac
i
t
y
.
c
. de
mand.
d.s
uppl
y
.
ANSWER:
d.
s
uppl
y
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
148. I
ft
hefigur
ei
npane
l(
a)r
e
fle
c
t
st
hel
ongr
une
qui
l
i
br
i
um ofapr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
t
,t
he
figur
ei
npane
l(
b)mos
tl
i
ke
l
yr
e
fle
c
t
s
a
. pe
r
f
e
c
t
l
yi
ne
l
as
t
i
cl
ongr
unmar
ke
ts
uppl
y
.
b.t
hei
de
at
ha
tf
r
e
ee
nt
r
yande
xi
toffir
msi
nt
hemar
ke
tl
e
adt
oonl
yonemar
ke
tpr
i
c
ei
nt
hel
ongr
un.
c
.t
hepr
oduc
toft
hei
ndi
vi
duals
uppl
yc
ur
ve
sf
ora
l
lfir
msi
nt
hemar
ke
t
.
d.t
hef
ac
tt
ha
tze
r
opr
ofit
sc
annotbes
us
t
ai
ne
di
nt
hel
ongr
un.
ANSWER:
b.
t
hei
de
at
ha
tf
r
e
ee
nt
r
yande
xi
toffir
msi
nt
hemar
ke
tl
e
adt
oonl
yonemar
ke
tpr
i
c
ei
nt
hel
ongr
un.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
149. I
namar
ke
tt
ha
tal
l
owsf
r
e
ee
nt
r
yande
xi
t
,
t
hepr
oc
e
s
sofe
nt
r
yande
xi
te
ndswhe
n,f
ort
het
ypi
c
alfir
mi
nt
hemar
ke
t
,
a
. pr
ofiti
sze
r
o.
b.t
ot
alr
e
ve
nuei
se
qualt
oa
ve
r
a
get
ot
alc
os
t
.
c
.a
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsmar
gi
nalc
os
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
pr
ofiti
sze
r
o.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
150. Whe
nne
w fir
mse
nt
e
rape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
t
,
a
. de
mandi
nc
r
e
as
e
s
.
b.t
hes
hor
t
r
unmar
ke
ts
uppl
yc
ur
ves
hi
f
t
sr
i
ght
.
c
.t
hes
hor
t
r
unmar
ke
ts
uppl
yc
ur
ves
hi
f
t
sl
e
f
t
.
d.e
xi
s
t
i
ngfir
mswi
l
li
nc
r
e
as
epr
i
c
e
si
nr
e
s
pons
et
ot
hee
nt
r
yoft
hene
w fir
ms
.
ANSWER:
b.
t
hes
hor
t
r
unmar
ke
ts
uppl
yc
ur
ves
hi
f
t
sr
i
ght
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
151. Whe
nne
w fir
mse
nt
e
rape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
t
,
a
. pr
ofit
sofe
xi
s
t
i
ngfir
mswi
l
lf
al
l
.
b.e
nt
e
r
i
ngfir
mswi
l
le
ar
nze
r
opr
ofitass
oonast
he
ye
nt
e
r
.
c
.e
xi
s
t
i
ngfir
mswi
l
ls
e
et
he
i
rc
os
t
sr
i
s
e
.
d.c
ons
ume
r
swi
l
ll
i
ke
l
yobs
e
r
vei
nc
r
e
as
i
ngpr
i
c
e
s
.
ANSWER:
a
.
pr
ofit
sofe
xi
s
t
i
ngfir
mswi
l
lf
al
l
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
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Chapter 14/Firms in Competitive Markets  432
152. I
nac
ompe
t
i
t
i
vemar
ke
tt
ha
ti
sc
har
ac
t
e
r
i
ze
dbyf
r
e
ee
nt
r
yande
xi
t
,
a
. al
lfir
mswi
l
lope
r
a
t
ea
te
ffic
i
e
nts
c
al
ei
nt
hes
hor
tr
un.
b.al
lfir
mswi
l
lope
r
a
t
ea
te
ffic
i
e
nts
c
al
ei
nt
hel
ongr
un.
c
.t
hepr
i
c
eoft
hepr
oduc
twi
l
ldi
ffe
rac
r
os
sfir
ms
.
d.t
henumbe
rofs
e
l
l
e
r
si
nt
hemar
ke
twi
l
ls
t
e
adi
l
yde
c
r
e
as
eove
rt
i
me
.
ANSWER:
b.
al
lfir
mswi
l
lope
r
a
t
ea
te
ffic
i
e
nts
c
al
ei
nt
hel
ongr
un.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
153. I
fal
le
xi
s
t
i
ngfir
msandal
lpot
e
nt
i
alfir
msha
vet
hes
amec
os
tc
ur
ve
s
,t
he
r
ear
enoi
nput
si
nl
i
mi
t
e
dquant
i
t
i
e
s
,
and
t
hemar
ke
ti
sc
har
ac
t
e
r
i
ze
dbyf
r
e
ee
nt
r
yande
xi
t
,
t
he
nt
hel
ongr
un
a
. mar
ke
ts
uppl
yc
ur
vei
se
qualt
ot
hes
um ofmar
gi
nalc
os
t
.
b.s
uppl
yc
ur
vef
ort
hemar
ke
tmus
ts
l
opedownwar
d.
c
. mar
ke
ts
uppl
yc
ur
vemus
ts
l
opeupwar
d.
d.s
uppl
yc
ur
vef
ort
hemar
ke
ti
shor
i
z
ont
alande
qualt
ot
hemi
ni
mum ofl
ongr
una
ve
r
a
gec
os
tf
ore
ac
hfir
m.
ANSWER:
d.
s
uppl
yc
ur
vef
ort
hemar
ke
ti
shor
i
z
ont
alande
qualt
ot
hemi
ni
mum ofl
ongr
una
ve
r
a
gec
os
tf
ore
ac
h
fir
m.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
154. Whe
nal
lfir
msandpot
e
nt
i
alfir
msi
namar
ke
tha
vet
hes
amec
os
tc
ur
ve
s
,t
hel
ongr
une
qui
l
i
br
i
um ofac
ompe
t
i
t
i
ve
mar
ke
twi
t
hf
r
e
ee
nt
r
yande
xi
twi
l
lbec
har
ac
t
e
r
i
ze
dbyfir
ms
a
.e
ar
ni
ngs
mal
ll
e
ve
l
sofe
c
onomi
cpr
ofit
.
b.f
ac
i
ngt
hepr
os
pe
c
toff
ut
ur
el
os
s
e
s
.
c
. ope
r
a
t
i
nga
te
ffic
i
e
nts
c
al
e
.
d.t
ha
tbandt
oge
t
he
rt
or
ai
s
emar
ke
tpr
i
c
e
s
.
ANSWER:
c
.
ope
r
a
t
i
nga
te
ffic
i
e
nts
c
al
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Us
et
hef
ol
l
owi
ngi
nf
or
ma
t
i
ont
oans
we
rque
s
t
i
ons1
55and156.
I
nMar
c
hof2000as
t
udys
pons
or
e
dbyt
heFoodCons
ume
rSaf
e
t
yBoar
df
oundt
ha
tc
ons
umpt
i
onofi
r
r
adi
a
t
e
dgr
ape
f
r
ui
t
i
nc
r
e
as
e
dt
hehe
al
t
hofl
abor
a
t
or
yr
a
t
s
.Asar
e
s
ul
tofna
t
i
onalpr
e
s
sc
ove
r
a
geoft
her
e
por
t
,
t
hede
mandf
ori
r
r
adi
a
t
e
d
gr
ape
f
r
ui
ti
nc
r
e
as
e
ddr
ama
t
i
c
al
l
y
.Or
gani
cf
a
r
me
r
swe
r
eabl
et
os
wi
t
c
hf
r
om or
gani
cpr
oduc
t
i
onofgr
ape
f
r
ui
tt
oi
r
r
adi
a
t
e
d
pr
oduc
t
i
onwi
t
hnoaddi
t
i
onalc
os
t
.As
s
umet
ha
tt
hegr
ape
f
r
ui
tmar
ke
ts
a
t
i
s
fie
sal
loft
hea
t
t
r
i
but
e
sofpe
r
f
e
c
tc
ompe
t
i
t
i
on.
155. Asar
e
s
ul
toft
hei
nc
r
e
as
ei
nt
hede
mandf
orgr
ape
f
r
ui
t
,wewoul
dpr
e
di
c
tt
ha
ti
nt
hes
hor
tr
unt
he
a
. pr
oduc
t
i
onofgr
ape
f
r
ui
twoul
dbea
te
ffic
i
e
nts
c
al
e
.
b.pr
i
c
eofgr
ape
f
r
ui
twoul
dr
i
s
e
.
c
.t
ot
alc
os
tf
ore
xi
s
t
i
ngi
r
r
adi
a
t
e
dgr
ape
f
r
ui
tpr
oduc
e
r
smus
tr
i
s
e
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
pr
i
c
eofgr
ape
f
r
ui
twoul
dr
i
s
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
156. I
ft
hei
nc
r
e
as
e
dpr
oduc
t
i
onofi
r
r
adi
a
t
e
dgr
ape
f
r
ui
tc
aus
e
dar
i
s
ei
nt
hemar
gi
nalt
r
ans
por
t
a
t
i
onc
os
t
sofmovi
ng
i
r
r
adi
a
t
e
dgr
ape
f
r
ui
tt
omar
ke
t
,
t
he
a
.s
hor
t
r
unmar
ke
ts
uppl
yc
ur
vef
ori
r
r
adi
a
t
e
dgr
ape
f
r
ui
twoul
dbeaffe
c
t
e
d,
butnott
hel
ongr
unmar
ke
ts
uppl
y
.
b.l
ongr
unmar
ke
ts
uppl
yc
ur
vef
ori
r
r
adi
a
t
e
dgr
ape
f
r
ui
twoul
dbepe
r
f
e
c
t
l
ye
l
as
t
i
c
.
c
.l
ongr
unmar
ke
ts
uppl
yofi
r
r
adi
a
t
e
dgr
ape
f
r
ui
twoul
dbedownwar
ds
l
opi
ng.
d.l
ongr
unmar
ke
ts
uppl
yofi
r
r
adi
a
t
e
dgr
ape
f
r
ui
twoul
dbeupwar
ds
l
opi
ng.
ANSWER:
d.
l
ongr
unmar
ke
ts
uppl
yofi
r
r
adi
a
t
e
dgr
ape
f
r
ui
twoul
dbeupwar
ds
l
opi
ng.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
157. I
nl
ongr
une
qui
l
i
br
i
um ofac
ompe
t
i
t
i
vemar
ke
t
,
t
henumbe
roffir
msi
nt
hemar
ke
tadj
us
t
ss
ot
ha
tal
loft
hemar
ke
t
de
mandi
ss
a
t
i
s
fie
da
tapr
i
c
ee
qualt
o
a
.s
unkc
os
t
.
b.t
hemaxi
mum val
ueofmar
gi
nalc
os
t
.
c
.t
hemi
ni
mum val
ueofa
ve
r
a
get
ot
alc
os
t
.
d.t
hemi
ni
mum val
ueofa
ve
r
a
gevar
i
abl
ec
os
t
.
ANSWER:
c
.
t
hemi
ni
mum val
ueofa
ve
r
a
get
ot
alc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
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Chapter 14/Firms in Competitive Markets  433
158. Thee
nt
r
yofne
w fir
msi
nt
oac
ompe
t
i
t
i
vemar
ke
twi
l
l
a
.i
nc
r
e
as
emar
ke
ts
uppl
yandi
nc
r
e
as
emar
ke
tpr
i
c
e
s
.
b.i
nc
r
e
as
emar
ke
ts
uppl
yandde
c
r
e
as
emar
ke
tpr
i
c
e
s
.
c
. de
c
r
e
as
emar
ke
ts
uppl
yandi
nc
r
e
as
emar
ke
tpr
i
c
e
s
.
d.de
c
r
e
as
emar
ke
ts
uppl
yandde
c
r
e
as
emar
ke
tpr
i
c
e
s
.
ANSWER:
b.
i
nc
r
e
as
emar
ke
ts
uppl
yandde
c
r
e
as
emar
ke
tpr
i
c
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
159. Whe
nc
al
c
ul
a
t
i
nge
c
onomi
cpr
ofit
,t
ot
alc
os
t
si
nc
l
ude
a
. oppor
t
uni
t
yc
os
t
s
.
b.fix
e
dc
os
t
s
.
c
. var
i
abl
ec
os
t
s
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
3
160. Thee
xi
tofe
xi
s
t
i
ngfir
msf
r
om ac
ompe
t
i
t
i
vema
r
ke
twi
l
l
a
.i
nc
r
e
as
emar
ke
ts
uppl
yandi
nc
r
e
as
emar
ke
tpr
i
c
e
s
.
b.i
nc
r
e
as
emar
ke
ts
uppl
yandde
c
r
e
as
emar
ke
tpr
i
c
e
s
.
c
. de
c
r
e
as
emar
ke
ts
uppl
yandi
nc
r
e
as
emar
ke
tpr
i
c
e
s
.
d.de
c
r
e
as
emar
ke
ts
uppl
yandde
c
r
e
as
emar
ke
tpr
i
c
e
s
.
ANSWER:
c
.
de
c
r
e
as
emar
ke
ts
uppl
yandi
nc
r
e
as
emar
ke
tpr
i
c
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
161. Thee
nt
r
yande
xi
tde
c
i
s
i
onsoffir
msi
nac
ompe
t
i
t
i
vemar
ke
tar
es
i
gnal
e
dby
a
. hi
ghorl
ow de
mandf
orafir
m’
spr
oduc
t
.
b.hi
ghc
api
t
alc
os
t
s
.
c
.l
ow c
api
t
alc
os
t
s
.
d.pr
ofit
sandl
os
s
e
s
.
ANSWER:
d.
pr
ofit
sandl
os
s
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
162. Whe
nfir
msar
ene
i
t
he
re
nt
e
r
i
ngnore
xi
t
i
ngape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
t
,
a
.t
ot
alc
os
tmus
te
qualt
ot
alr
e
ve
nue
.
b.e
c
onomi
cpr
ofit
smus
tbez
e
r
o.
c
.a
ve
r
a
ger
e
ve
nuemus
te
quala
ve
r
a
get
ot
alc
os
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
163. Whe
ne
nt
r
yande
xi
tbe
ha
vi
oroffir
msi
nani
ndus
t
r
ydoe
snotaffe
c
tafir
m’
sc
os
ts
t
r
uc
t
ur
e
,
a
.t
hel
ongr
unmar
ke
ts
uppl
yc
ur
vemus
tbehor
i
z
ont
al
.
b.t
hel
ongr
unmar
ke
ts
uppl
yc
ur
vemus
tbeupwar
ds
l
opi
ng.
c
.t
hel
ongr
unmar
ke
ts
uppl
yc
ur
vemus
tbedownwar
ds
l
opi
ng.
d.wec
an’
tt
e
l
lanyt
hi
ngaboutt
hes
hapeoft
hel
ongr
unmar
ke
ts
uppl
yc
ur
ve
.
ANSWER:
a
.
t
hel
ongr
unmar
ke
ts
uppl
yc
ur
vemus
tbehor
i
z
ont
al
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
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Chapter 14/Firms in Competitive Markets  434
Us
et
hefigur
e
sbe
l
ow t
oans
we
rque
s
t
i
ons164t
hr
ough168.
164. Whe
nt
hemar
ke
ti
si
nl
ongr
une
qui
l
i
br
i
um a
tpoi
ntAi
npane
l(
b)
,
t
hefir
mr
e
pr
e
s
e
nt
e
di
npane
l(
a)wi
l
l
a
. ha
veaz
e
r
oe
c
onomi
cpr
ofit
.
b.ha
veane
ga
t
i
vea
c
c
ount
i
ngpr
ofit
.
c
.e
xi
tt
hemar
ke
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
ha
veaz
e
r
oe
c
onomi
cpr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
165. As
s
umet
ha
tt
hemar
ke
ts
t
ar
t
si
ne
qui
l
i
br
i
um a
tpoi
ntAi
npane
l(
b)
.Ani
nc
r
e
as
ei
nde
mandf
r
om De
mand0t
o
De
mand1wi
l
lr
e
s
ul
ti
n
a
. ane
w mar
ke
te
qui
l
i
br
i
um a
tpoi
ntD.
b.ane
ve
nt
uali
nc
r
e
as
ei
nt
henumbe
roffir
msi
nt
hemar
ke
tandane
wl
ongr
une
qui
l
i
br
i
um a
tpoi
ntC.
c
.r
i
s
i
ngpr
i
c
e
sandf
al
l
i
ngpr
ofit
sf
ore
xi
s
t
i
ngfir
msi
nt
hemar
ke
t
.
d.f
al
l
i
ngpr
i
c
e
sandf
al
l
i
ngpr
ofit
sf
ore
xi
s
t
i
ngfir
msi
nt
hemar
ke
t
.
ANSWER:
b.
ane
ve
nt
uali
nc
r
e
as
ei
nt
henumbe
roffir
msi
nt
hemar
ke
tandane
wl
ongr
une
qui
l
i
br
i
um a
tpoi
ntC.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
166. I
ft
hemar
ke
ts
t
ar
t
si
ne
qui
l
i
br
i
um a
tpoi
ntCi
npane
l(
b)
,
ade
c
r
e
as
ei
nde
mandwi
l
lul
t
i
ma
t
e
l
yl
e
adt
o
a
. mor
efir
msi
nt
hei
ndus
t
r
y
,
butl
owe
rl
e
ve
l
sofpr
oduc
t
i
onf
ore
ac
hfir
m.
b.f
e
we
rfir
msi
nt
hemar
ke
t
.
c
. ane
wl
ongr
une
qui
l
i
br
i
um a
tpoi
ntD i
npane
l(
b)
.
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
b.
f
e
we
rfir
msi
nt
hemar
ke
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
167. Whe
nafir
mi
nac
ompe
t
i
t
i
vemar
ke
t
,
l
i
ket
heonede
pi
c
t
e
di
npane
l(
a)
,obs
e
r
ve
smar
ke
tpr
i
c
er
i
s
i
ngf
r
om P1t
oP2,
i
t
i
smos
tl
i
ke
l
yt
her
e
s
ul
tof
a
.e
nt
r
anc
eofne
w fir
msi
nt
ot
hemar
ke
t
.
b.t
hee
xi
tofe
xi
s
t
i
ngfir
msi
nt
hemar
ke
t
.
c
. ani
nc
r
e
as
ei
nmar
ke
ts
uppl
yf
r
om Suppl
y0t
oSuppl
y1.
d.ani
nc
r
e
as
ei
nmar
ke
tde
mandf
r
om De
mand0t
oDe
mand1.
ANSWER:
b.
t
hee
xi
tofe
xi
s
t
i
ngfir
msi
nt
hemar
ke
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  435
168. Ani
nc
r
e
as
ei
nmar
ke
ts
uppl
yf
r
om Suppl
y0t
oSuppl
y1i
smos
tl
i
ke
l
yt
her
e
s
ul
tof
a
.e
xi
s
t
i
ngfir
msc
ha
ngi
ngt
he
i
rc
os
ts
t
r
uc
t
ur
e
.
b.e
xi
s
t
i
ngfir
msi
nt
hemar
ke
ti
nc
r
e
as
i
ngt
he
i
rl
e
ve
lofpr
oduc
t
i
onbe
yondQ1.
c
.t
hee
nt
r
anc
eofne
w fir
msi
nt
hemar
ke
t
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
t
hee
nt
r
anc
eofne
w fir
msi
nt
hemar
ke
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
169. Whe
nmana
ge
r
soffir
msi
nac
ompe
t
i
t
i
vemar
ke
tobs
e
r
vef
al
l
i
ngpr
ofit
s
,t
he
yar
el
i
ke
l
yt
oi
nf
e
rt
ha
tt
hemar
ke
ti
s
c
har
ac
t
e
r
i
ze
dby
a
. avi
ol
a
t
i
onofc
onve
nt
i
onalmar
ke
tf
or
c
e
s
.
b.ove
r
i
nve
s
t
me
nt
.
c
.r
i
s
i
ngpr
i
c
e
s
.
d.t
oof
e
w fir
msi
nt
hemar
ke
t
.
ANSWER:
c
.
r
i
s
i
ngpr
i
c
e
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
170. A c
ompe
t
i
t
i
vemar
ke
ti
sc
ompr
i
s
e
doffir
mst
ha
tf
ac
ei
de
nt
i
c
alc
os
ts
t
r
uc
t
ur
e
s
.Thefir
mse
xpe
r
i
e
nc
eani
nc
r
e
as
ei
n
de
mandt
ha
tr
e
s
ul
t
si
npos
i
t
i
vepr
ofit
sf
ort
hefir
ms
.Whi
c
hoft
hef
ol
l
owi
nge
ve
nt
sar
et
he
nmos
tl
i
ke
l
yt
ooc
c
ur
?
(
i
) Ne
w fir
mswi
l
le
nt
e
rt
hemar
ke
t
.
(
i
i
) I
nt
hes
hor
tr
un,pr
i
c
ewi
l
lr
i
s
e
;i
nt
hel
ongr
un,pr
i
c
ewi
l
lr
i
s
ef
ur
t
he
r
.
(
i
i
i
)I
nt
hel
ongr
un,al
lfir
mswi
l
lbepr
oduc
i
nga
tt
he
i
re
ffic
i
e
nts
c
al
e
.
a
.(
i
)and(
i
i
)onl
y
b.(
i
)and(
i
i
i
)onl
y
c
.(
i
i
)and(
i
i
i
)onl
y
d.(
i
)
,(
i
i
)and(
i
i
i
)
ANSWER:
b.
(
i
)and(
i
i
i
)onl
y
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
171. Whe
nfir
msi
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
tf
ac
et
hes
amec
os
t
s
,i
nt
hel
ongr
unt
he
ymus
tbeope
r
a
t
i
ng
a
. unde
rdi
s
e
c
onomi
e
sofs
c
al
e
.
b.wi
t
hs
mal
l
,butpos
i
t
i
ve
,l
e
ve
l
sofpr
ofit
.
c
.a
tt
he
i
re
ffic
i
e
nts
c
al
e
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
a
tt
he
i
re
ffic
i
e
nts
c
al
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
172. Whe
ns
omer
e
s
our
c
e
sus
e
di
npr
oduc
t
i
onar
eonl
ya
vai
l
abl
ei
nl
i
mi
t
e
dquant
i
t
i
e
s
,i
ti
sl
i
ke
l
yt
ha
tt
hel
ongr
uns
uppl
y
c
ur
vei
nac
ompe
t
i
t
i
vemar
ke
ti
s
a
. downwar
ds
l
opi
ng.
b.upwar
ds
l
opi
ng.
c
. hor
i
z
ont
al
.
d.ve
r
t
i
c
al
.
ANSWER:
b.
upwar
ds
l
opi
ng.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
173. Whe
nac
ompe
t
i
t
i
vemar
ke
te
xpe
r
i
e
nc
e
sani
nc
r
e
a
s
ei
nde
mandt
ha
ti
nduc
e
sani
nc
r
e
as
ei
npr
oduc
e
rc
os
t
s
,whi
c
hof
t
hef
ol
l
owi
ngi
smos
tl
i
ke
l
yt
oar
i
s
e
?
a
. Thel
ongr
unmar
ke
ts
uppl
yc
ur
vewi
l
lbeupwar
ds
l
opi
ng.
b.Thec
ondi
t
i
onoff
r
e
ee
nt
r
yi
nt
ot
hemar
ke
twi
l
lbevi
ol
a
t
e
d.
c
. Pr
oduc
e
rpr
ofit
smus
tf
al
li
nt
hel
ongr
un.
d.Al
loft
heabovear
el
i
ke
l
yt
oar
i
s
e
.
ANSWER:
a
.
Thel
ongr
unmar
ke
ts
uppl
yc
ur
vewi
l
lbeupwar
ds
l
opi
ng.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
174. Whe
nfir
msi
nac
ompe
t
i
t
i
vemar
ke
tha
vedi
ffe
r
e
ntc
os
t
s
,
i
ti
sl
i
ke
l
yt
ha
t
a
.f
r
e
ee
nt
r
yande
xi
ti
nt
hemar
ke
ti
sl
i
ke
l
yt
obevi
ol
a
t
e
d.
b.t
hemar
ke
twi
l
lnol
onge
rbec
ons
i
de
r
e
dc
ompe
t
i
t
i
ve
.
c
.l
ongr
unmar
ke
ts
uppl
ywi
l
lbedownwar
ds
l
opi
ng.
d.s
omefir
mswi
l
le
ar
ne
c
onomi
cpr
ofit
si
nt
hel
ongr
un.
ANSWER:
d.
s
omefir
mswi
l
le
ar
ne
c
onomi
cpr
ofit
si
nt
hel
ongr
un.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  436
175. Re
gar
dl
e
s
soft
hec
os
ts
t
r
uc
t
ur
eoffir
msi
nac
ompe
t
i
t
i
vemar
ke
t
,i
nt
hel
ongr
un
a
. fir
mswi
l
le
xpe
r
i
e
nc
er
i
s
i
ngde
mandf
ort
he
i
rpr
oduc
t
s
.
b.t
hemar
gi
nalfir
m wi
l
le
ar
nz
e
r
oe
c
onomi
cpr
ofit
.
c
. fir
mswi
l
le
xpe
r
i
e
nc
eal
e
s
sc
ompe
t
i
t
i
vemar
ke
te
nvi
r
onme
nt
.
d.e
xi
tande
nt
r
yi
sl
i
ke
l
yt
ol
e
adt
oahor
i
z
ont
all
ongr
uns
uppl
yc
ur
ve
.
ANSWER:
b.
t
hemar
gi
nalfir
m wi
l
le
ar
nz
e
r
oe
c
onomi
cpr
ofit
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
176. A l
ongr
uns
uppl
yc
ur
vet
ha
ti
sfla
t
t
e
rt
hanas
hor
t
r
uns
uppl
yc
ur
ver
e
s
ul
t
sf
r
om whi
c
hoft
hef
ol
l
owi
ng?
a
. Fi
r
msc
ane
nt
e
rande
xi
tamar
ke
tmor
ee
as
i
l
yi
nt
hel
ongr
unt
hani
nt
hes
hor
tr
un.
b.Longr
uns
uppl
yc
ur
ve
sar
es
ome
t
i
me
sdownwar
ds
l
opi
ng.
c
. Compe
t
i
t
i
vefir
msha
vemor
ec
ont
r
olove
rde
mandi
nt
hel
ongr
un.
d.Fi
r
msi
nac
ompe
t
i
t
i
vemar
ke
tf
ac
ei
de
nt
i
c
alc
os
ts
t
r
uc
t
ur
e
s
.
ANSWER:
a
.
Fi
r
msc
ane
nt
e
rande
xi
tamar
ke
tmor
ee
as
i
l
yi
nt
hel
ongr
unt
hani
nt
hes
hor
tr
un.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
177. Themar
ke
tf
orc
r
af
tar
tus
e
di
nhomede
c
or
a
t
i
oni
save
r
yc
ompe
t
i
t
i
vemar
ke
t
.I
nt
hi
smar
ke
t
,c
os
t
svar
ys
i
nc
es
ome
pe
opl
ewor
kf
as
t
e
rt
hanot
he
r
sandha
vemor
ear
t
i
s
t
i
ct
al
e
nti
npr
oduc
i
ngc
r
af
tar
t
.
I
nt
hi
sc
ompe
t
i
t
i
vemar
ke
t
,we
woul
de
xpe
c
tt
oobs
e
r
ve
a
. fir
mst
ha
tar
ege
ne
r
al
l
yunr
e
s
pons
i
vet
oc
hangei
nde
mand.
b.l
i
t
t
l
ee
xi
tande
nt
r
y
.
c
. as
hor
t
r
uns
uppl
yc
ur
vemor
ee
l
as
t
i
ct
hant
hema
r
ke
t
’
sl
ongr
uns
uppl
yc
ur
ve
.
d.anupwar
ds
l
opi
ngl
ongr
uns
uppl
yc
ur
ve
.
ANSWER:
b.
l
i
t
t
l
ee
xi
tande
nt
r
y
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
178. A mar
ke
tmi
ghtha
veanupwar
ds
l
opi
ngl
ongr
uns
uppl
yc
ur
vei
f
a
. fir
msha
vedi
ffe
r
e
ntc
os
t
s
.
b.c
ons
ume
r
se
x
e
r
c
i
s
emar
ke
tpowe
rove
rpr
oduc
e
r
s
.
c
. al
lf
ac
t
or
sofpr
oduc
t
i
onar
ee
s
s
e
nt
i
al
l
ya
vai
l
abl
ei
nunl
i
mi
t
e
ds
uppl
y
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
a
.
fir
msha
vedi
ffe
r
e
ntc
os
t
s
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
179. Whe
nne
we
nt
r
ant
st
oac
ompe
t
i
t
i
vemar
ke
tha
vehi
ghe
rc
os
t
st
hane
xi
s
t
i
ngfir
ms
,
a
. ac
c
ount
i
ngpr
ofit
swi
l
lbet
hepr
i
mar
ys
i
gnalf
ore
nt
r
anc
e
.
b.s
unkc
os
t
sbe
c
omeani
mpor
t
antde
t
e
r
mi
nantofs
hor
t
r
une
nt
r
anc
es
t
r
a
t
e
gy
.
c
. mar
ke
tpr
i
c
emus
tber
i
s
i
ng.
d.Noneoft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
mar
ke
tpr
i
c
emus
tber
i
s
i
ng.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
180. Theas
s
umpt
i
onofafix
e
dnumbe
roffir
msi
sappr
opr
i
a
t
ef
oranal
ys
i
sof
a
.t
hes
hor
tr
un,butnott
hel
ongr
un.
b.t
hel
ongr
un,
butnott
hes
hor
tr
un.
c
. bot
ht
hes
hor
tr
unandt
hel
ongr
un.
d.ne
i
t
he
rt
hes
hor
tr
unnort
hel
ongr
un.
ANSWER:
a
.
t
hes
hor
tr
un,butnott
hel
ongr
un.
TYPE:
M DI
FFI
CULTY:1SECTI
ON:14.
3
181. I
napar
t
i
c
ul
armar
ke
t
,
t
he
r
ear
e500fir
ms
.Ea
c
hfir
m hasamar
gi
nalc
os
tof$30whe
ni
tpr
oduc
e
s2
00uni
t
sofout
put
.
Onepoi
ntont
hemar
ke
ts
uppl
yc
ur
vei
s
a
.(
Quant
i
t
y=200,
Pr
i
c
e=$30)
.
b.(
Quant
i
t
y=500,
Pr
i
c
e=$30)
.
c
.(
Quant
i
t
y=100,
000
,Pr
i
c
e=$30)
.
d.(
Quant
i
t
y=100,
000
,Pr
i
c
e=$15,
000)
.
ANSWER:
c
.
(
Quant
i
t
y=100,
000
,Pr
i
c
e=$30)
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  437
182. Onec
ons
i
de
r
a
t
i
ont
ha
tappl
i
e
st
ot
heanal
ys
i
soft
hel
ongr
un,butnott
ot
heanal
ys
i
soft
hes
hor
tr
un,
i
s
a
.c
hange
si
nt
hepr
i
c
eoft
hepr
oduc
t
.
b.c
hange
si
nfir
ms
’pr
ofit
s
.
c
.e
nt
r
yande
xi
toffir
ms
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
c
.
e
nt
r
yande
xi
toffir
ms
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
183. Ent
r
yi
nt
oamar
ke
tbyne
w fir
mswi
l
l
a
.i
nc
r
e
as
et
hes
uppl
yoft
hegood.
b.i
nc
r
e
as
epr
ofit
sofe
xi
s
t
i
ngfir
ms
.
c
.i
nc
r
e
as
et
hepr
i
c
eoft
hegood.
d.al
loft
heabove
.
ANSWER:
a
.
i
nc
r
e
as
et
hes
uppl
yoft
hegood.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
184. Att
hee
ndofapr
oc
e
s
sofe
nt
r
yande
xi
t
,
f
ort
hemar
gi
nalfir
m
a
. pr
i
c
ei
se
qualt
oa
ve
r
a
get
ot
alc
os
t
.
b.t
ot
alr
e
ve
nuei
se
qualt
ot
ot
alc
os
t
.
c
.e
c
onomi
cpr
ofiti
sze
r
o.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
185. I
nt
hel
ongr
une
qui
l
i
br
i
um ofamar
ke
twi
t
hf
r
e
ee
nt
r
yande
xi
t
,
a
. mar
gi
nalc
os
te
x
c
e
e
dsa
ve
r
a
get
ot
alc
os
t
.
b.t
hepr
i
c
eoft
hegoode
x
c
e
e
dsa
ve
r
a
get
ot
alc
os
t
.
c
.a
ve
r
a
get
ot
alc
os
te
x
c
e
e
dst
hepr
i
c
eoft
hegood.
d.fir
msar
eope
r
a
t
i
nga
tt
he
i
re
ffic
i
e
nts
c
al
e
.
ANSWER:
d.
fir
msar
eope
r
a
t
i
nga
tt
he
i
re
ffic
i
e
nts
c
al
e
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
186. I
nt
hel
ongr
une
qui
l
i
br
i
um ofamar
ke
twi
t
hf
r
e
ee
nt
r
yande
xi
t
,
mar
gi
nalfir
msar
eope
r
a
t
i
ng
a
.a
tt
hepoi
ntwhe
r
ea
ve
r
a
get
ot
alc
os
te
qual
smar
gi
nalc
os
t
.
b.a
tt
hemi
ni
mum poi
ntont
he
i
ra
ve
r
a
get
ot
alc
os
tc
ur
ve
s
.
c
.a
tt
he
i
re
ffic
i
e
nts
c
al
e
.
d.Al
loft
heabovear
ec
or
r
e
c
t
.
ANSWER:
d.
Al
loft
heabovear
ec
or
r
e
c
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
187. A c
ompe
t
i
t
i
vemar
ke
thasahor
i
z
ont
all
ongr
uns
uppl
yc
ur
veandi
si
nl
ongr
une
qui
l
i
br
i
um.I
fde
mandde
c
r
e
as
e
s
,
wec
anbec
e
r
t
ai
nt
ha
ti
nt
hes
hor
t
r
un,
a
.a
tl
e
as
ts
omefir
mswi
l
ls
hutdown.
b.pr
i
c
ewi
l
lf
al
lbe
l
ow mar
gi
nalc
os
t
.
c
. pr
i
c
ewi
l
lf
al
lbe
l
ow a
ve
r
a
get
ot
alc
os
t
.
d.a
tl
e
as
ts
omefir
mswi
l
le
xi
tt
hei
ndus
t
r
y
.
ANSWER:
c
.
pr
i
c
ewi
l
lf
al
lbe
l
ow a
ve
r
a
get
ot
alc
os
t
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  438
188. The
r
ear
e500i
de
nt
i
c
alfir
msi
nac
ompe
t
i
t
i
vemar
ke
t
.
Thefir
msdonotus
eanyr
e
s
our
c
e
st
ha
tar
ea
vai
l
abl
ei
nl
i
mi
t
e
d
quant
i
t
i
e
s
,andal
loft
he
m ha
vet
hef
ol
l
owi
ngc
os
ts
t
r
uc
t
ur
e
:
Out
put
0
1
2
3
4
5
Tot
alCos
t
$5
$10
$12
$15
$24
$40
Thel
ongr
uns
uppl
yc
ur
vef
ort
hi
smar
ke
ti
s
a
. pos
i
t
i
ve
l
ys
l
ope
d.
b.hor
i
z
ont
ala
tapr
i
c
eof$3
.
33.
c
. hor
i
z
ont
ala
tapr
i
c
eof$5
.
d.hor
i
z
ont
ala
tapr
i
c
eof$7
.
ANSWER:
c
.
hor
i
z
ont
ala
tapr
i
c
eof$5
.
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
3
189. Thewi
dge
ti
ndus
t
r
yhast
hr
e
et
ype
soffir
ms
.Thec
os
ts
t
r
uc
t
ur
ef
ore
ac
ht
ypei
sasf
ol
l
ows
:
Out
put
0
1
2
3
4
5
TypeA
$5
$10
$12
$15
$24
$40
Tot
alCos
t
TypeB
$5
$12
$14
$18
$30
$50
TypeC
$5
$8
$10
$12
$20
$30
I
ft
hi
si
sac
ompe
t
i
t
i
vemar
ke
tandi
ti
si
nl
ongr
une
qui
l
i
br
i
um,wha
tmus
tt
hepr
i
c
ebei
fal
lt
hr
e
et
ype
soffir
msar
e
pr
oduc
i
ng?
a
. $4
b.$5
c
. $6
d.$7
ANSWER:
c
.
$6
TYPE:
M DI
FFI
CULTY:3SECTI
ON:14.
3
190. Cons
i
de
rac
ompe
t
i
t
i
vemar
ke
twi
t
hal
ar
genumbe
rofi
de
nt
i
c
alfir
ms
.Thefir
msi
nt
hi
smar
ke
tdonotus
ea
ny
r
e
s
our
c
e
st
ha
tar
ea
vai
l
abl
eonl
yi
nl
i
mi
t
e
dquant
i
t
i
e
s
.I
nl
ongr
une
qui
l
i
br
i
um,mar
ke
tpr
i
c
e
a
.i
sde
t
e
r
mi
ne
dbyde
mand.
b.i
sde
t
e
r
mi
ne
dbyt
hemi
ni
mum poi
ntont
hefir
ms
’a
ve
r
a
get
ot
alc
os
tc
ur
ve
.
c
.i
sde
t
e
r
mi
ne
dbyt
hemi
ni
mum poi
ntont
hefir
ms
’a
ve
r
a
gevar
i
abl
ec
os
tc
ur
ve
.
d.de
pe
ndsonhow manyfir
mse
xi
s
ti
nt
hei
ndus
t
r
y
.
ANSWER:
b.
i
sde
t
e
r
mi
ne
dbyt
hemi
ni
mum poi
ntont
hefir
ms
’a
ve
r
a
get
ot
alc
os
tc
ur
ve
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
191. Cons
i
de
rac
ompe
t
i
t
i
vemar
ke
twi
t
hal
ar
genumbe
rofi
de
nt
i
c
alfir
ms
.Thefir
msi
nt
hi
smar
ke
tdonotus
ea
ny
r
e
s
our
c
e
st
ha
tar
ea
vai
l
abl
eonl
yi
nl
i
mi
t
e
dquant
i
t
i
e
s
.I
nt
hi
smar
ke
t
,
ani
nc
r
e
as
ei
nde
mandwi
l
l
a
.i
nc
r
e
as
epr
i
c
ei
nt
hes
hor
tr
un,
butnoti
nt
hel
ongr
un.
b.i
nc
r
e
as
epr
i
c
ei
nt
hel
ongr
un,butnoti
nt
hes
hor
tr
un.
c
.i
nc
r
e
as
epr
i
c
ebot
hi
nt
hes
hor
tandt
hel
ongr
un.
d.notaffe
c
tpr
i
c
ei
ne
i
t
he
rt
hes
hor
tort
hel
ongr
un.
ANSWER:
a
.
i
nc
r
e
as
epr
i
c
ei
nt
hes
hor
tr
un,
butnoti
nt
hel
ongr
un.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
3
Downloaded by Th? Thái An Nguy?n (thaian080804@gmail.com)
lOMoARcPSD|18597384
Chapter 14/Firms in Competitive Markets  439
192. Whi
c
hoft
hef
ol
l
owi
ngs
t
a
t
e
me
nt
si
sf
al
s
e
?
a
.I
nl
ongr
une
qui
l
i
br
i
um,mar
gi
nalfir
msmakeze
r
oe
c
onomi
cpr
ofit
.
b.Tomaxi
mi
zepr
ofit
,
fir
mss
houl
dpr
oduc
ea
tal
e
ve
lofout
putwhe
r
epr
i
c
ee
qual
smar
gi
nalr
e
ve
nue
.
c
. Theamountofgol
di
nt
hewor
l
di
sl
i
mi
t
e
d.The
r
e
f
or
e
,t
hegol
dj
e
we
l
r
ymar
ke
tpr
oba
bl
yhasal
ongr
uns
uppl
y
c
ur
vet
ha
ti
supwar
ds
l
opi
ng.
d.Longr
uns
uppl
yc
ur
ve
sar
et
ypi
c
al
l
ymor
ee
l
as
t
i
ct
hans
hor
t
r
uns
uppl
yc
ur
ve
s
.
ANSWER:
b.
Tomaxi
mi
zepr
ofit
,
fir
mss
houl
dpr
oduc
ea
tal
e
ve
lofout
putwhe
r
epr
i
c
ee
qual
smar
gi
nalr
e
ve
nue
.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
1and14.
3
193. Thepr
oduc
t
i
onde
c
i
s
i
onsofpe
r
f
e
c
t
l
yc
ompe
t
i
t
i
vefir
msf
ol
l
ow t
hepr
i
nc
i
pl
eofe
c
onomi
c
s
,whi
c
hs
t
a
t
e
st
ha
tr
a
t
i
onal
pe
opl
e
a
.c
ons
i
de
rs
unkc
os
t
s
.
b.e
qua
t
epr
i
c
e
st
ot
hea
ve
r
a
gec
os
t
sofpr
oduc
t
i
on.
c
. wi
l
le
ve
nt
ual
l
yl
e
a
vemar
ke
t
st
ha
te
xpe
r
i
e
nc
ez
e
r
opr
ofit
.
d.t
hi
nka
tt
hemar
gi
n.
ANSWER:
d.
t
hi
nka
tt
hemar
gi
n.
TYPE:
M DI
FFI
CULTY:2SECTI
ON:14.
4
TRUE/
FALSE
1. I
nc
ompe
t
i
t
i
vemar
ke
t
s
,fir
mst
ha
tr
ai
s
et
he
i
rpr
i
c
e
sar
et
ypi
c
al
l
yr
e
war
de
dwi
t
hl
ar
ge
rpr
ofit
s
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
1
2. Whe
ni
ndi
vi
dualfir
msi
nc
ompe
t
i
t
i
vemar
ke
t
si
nc
r
e
as
et
he
i
rpr
oduc
t
i
on,i
ti
sl
i
ke
l
yt
ha
tt
hemar
ke
tpr
i
c
ewi
l
lf
al
l
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
1
3. I
nac
ompe
t
i
t
i
vemar
ke
t
,
fir
msar
eunabl
et
odi
ffe
r
e
nt
i
a
t
et
he
i
rpr
oduc
tf
r
om t
ha
tofot
he
rpr
oduc
e
r
s
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:1SECTI
ON:14
.
1
4. Fi
r
msi
nc
ompe
t
i
t
i
vemar
ke
t
sar
es
ai
dt
obepr
i
c
et
ake
r
s
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:1SECTI
ON:14
.
1
5. Forafir
mi
nac
ompe
t
i
t
i
vemar
ke
t
,
mar
gi
nalr
e
ve
nuei
sal
wa
yse
qualt
oa
ve
r
a
ger
e
ve
nue
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
1
6. Theas
s
umpt
i
onoff
r
e
ee
nt
r
yande
xi
ti
sne
c
e
s
s
ar
yf
orfir
msi
nac
ompe
t
i
t
i
vemar
ke
tt
obepr
i
c
et
ake
r
s
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
1
7.
Toans
we
rt
heque
s
t
i
on,"
How muc
hr
e
ve
nuedoe
st
hef
ar
mr
e
c
e
i
vef
ort
het
ypi
c
algal
l
onofmi
l
k?
"adai
r
yf
ar
me
r
mus
tbeabl
et
oc
al
c
ul
a
t
es
unkc
os
t
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
1SECTI
ON:14
.
1
8. A fir
m mus
tbepar
t
i
c
i
pa
t
i
ngi
nac
ompe
t
i
t
i
vemar
ke
tf
ora
ve
r
a
ger
e
ve
nuet
oe
qualpr
i
c
e
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
1
9.
A pr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
li
nc
r
e
as
epr
oduc
t
i
onwhe
na
ve
r
a
ger
e
ve
nuee
x
c
e
e
dsmar
gi
nal
c
os
t
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
10. I
nmaki
ngas
hor
t
r
unpr
ofit
maxi
mi
zi
ngpr
oduc
t
i
onde
c
i
s
i
on,t
hefir
m mus
tc
ons
i
de
rbot
hfix
e
dandvar
i
abl
ec
os
t
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
2
11. Themar
gi
nalfir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
le
ar
nz
e
r
oe
c
onomi
cpr
ofit
si
nt
hel
ongr
un.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
12. A pr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
le
ar
nze
r
oac
c
ount
i
ngpr
ofit
si
nt
hel
ongr
un.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
2
13. A fir
m wi
l
ls
hutdowni
nt
hes
hor
tr
uni
fr
e
ve
nuei
snots
uffic
i
e
ntt
oc
ove
ri
t
svar
i
abl
ec
os
t
sofpr
oduc
t
i
on.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
14. A fir
m wi
l
ls
hutdowni
nt
hes
hor
tr
uni
fr
e
ve
nuei
snots
uffic
i
e
ntt
oc
ove
ral
lofi
t
sfix
e
dc
os
t
sofpr
oduc
t
i
on.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
2
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Chapter 14/Firms in Competitive Markets  440
15. Thes
uppl
yc
ur
veofafir
mi
nac
ompe
t
i
t
i
vemar
ke
ti
st
hea
ve
r
a
gevar
i
abl
ec
os
tc
ur
ve
,abovet
hemi
ni
mum of
mar
gi
nalc
os
t
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
2
16. A fir
mi
nac
ompe
t
i
t
i
vemar
ke
twi
l
lmaxi
mi
zepr
ofitwhe
nt
hel
e
ve
lofpr
oduc
t
i
oni
ss
uc
ht
ha
tmar
gi
nalc
os
te
qual
s
pr
i
c
e
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
17. Byc
ompar
i
ngt
hemar
gi
nalr
e
ve
nueandmar
gi
nalc
os
tf
r
om e
ac
huni
tpr
oduc
e
d,afir
mi
nac
ompe
t
i
t
i
vemar
ke
tc
an
de
t
e
r
mi
net
hepr
ofit
maxi
mi
zi
ngl
e
ve
lofpr
oduc
t
i
on.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
18. A fir
m’
si
nc
e
nt
i
vet
oc
ompar
emar
gi
nalr
e
ve
nueandmar
gi
nalc
os
ti
sanappl
i
c
a
t
i
onoft
hepr
i
nc
i
pl
et
ha
tr
a
t
i
onal
pe
opl
et
hi
nka
tt
hemar
gi
n.
ANSWER:
TTYPE:TFDI
FFI
CULTY:1SECTI
ON:14
.
2
19. A di
s
t
i
nc
t
i
vef
e
a
t
ur
eoft
hea
ve
r
a
get
ot
alc
os
tc
ur
vei
st
ha
ti
ti
supwar
ds
l
opi
nga
te
ve
r
ypoi
nt
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
1SECTI
ON:14
.
2
20. Mar
gi
naladj
us
t
me
nt
st
opr
oduc
t
i
one
ndwhe
nfir
msi
nc
ompe
t
i
t
i
vemar
ke
t
se
xpe
r
i
e
nc
eapr
i
c
ee
qualt
omar
gi
nal
r
e
ve
nue
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
21. Whe
napr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
te
xpe
r
i
e
nc
e
sr
i
s
i
ngpr
i
c
e
s
,i
twi
l
lr
e
s
pondwi
t
hani
nc
r
e
as
ei
n
pr
oduc
t
i
on.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
22. Foraf
a
r
me
rf
ac
i
ngal
ongr
unde
c
i
s
i
onofwhe
t
he
rt
oe
xi
tt
hemar
ke
tornot
,
t
hec
os
tofhe
rl
andi
snotc
ons
i
de
r
e
dt
o
bes
unk.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
23. Al
loft
hef
ol
l
owi
ngc
ondi
t
i
onsar
ec
ons
i
s
t
e
ntwi
t
hafir
m’
sde
c
i
s
i
ont
os
hutdown:
TR<VC,TR/Q <VC/Q,andP<
MR.(
TR=t
ot
alr
e
ve
nue
,VC=var
i
abl
ec
os
t
,
Q =l
e
ve
lofpr
oduc
t
i
on,P=pr
i
c
e
,andMR=mar
gi
nalr
e
ve
nue
.
)
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
2
24. Be
c
aus
enot
hi
ngc
anbedoneabouts
unkc
os
t
st
he
yar
ei
r
r
e
l
e
vantt
ode
c
i
s
i
onsaboutbus
i
ne
s
ss
t
r
a
t
e
gy
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
25. A mi
ni
a
t
ur
egol
fc
our
s
ei
sagoode
xa
mpl
eofwhe
r
efix
e
dc
os
t
sbe
c
omer
e
l
e
vantt
ot
hede
c
i
s
i
onofwhe
nt
oope
nand
whe
nt
oc
l
os
ef
ort
hes
e
as
on.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
2
26. I
nt
hel
ongr
un,whe
npr
i
c
ei
sl
e
s
st
hana
ve
r
a
get
ot
alc
os
tf
oral
lpos
s
i
bl
el
e
ve
l
sofpr
oduc
t
i
on,afir
mi
nac
ompe
t
i
t
i
ve
mar
ke
twi
l
lc
hoos
et
oe
xi
t(
ornote
nt
e
r
)t
hemar
ke
t
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
2
27. Thel
ongr
une
qui
l
i
br
i
um i
nac
ompe
t
i
t
i
vemar
ke
tc
har
ac
t
e
r
i
ze
dbyfir
mswi
t
hi
de
nt
i
c
alc
os
t
si
sge
ne
r
al
l
y
c
har
ac
t
e
r
i
ze
dbyfir
msope
r
a
t
i
nga
te
ffic
i
e
nts
c
al
e
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
3
28. Whe
nar
e
s
our
c
eus
e
di
nt
hepr
oduc
t
i
onofagoods
ol
di
nac
ompe
t
i
t
i
vemar
ke
ti
sa
vai
l
abl
ei
nonl
yl
i
mi
t
e
dquant
i
t
i
e
s
,
t
hel
ongr
uns
uppl
yc
ur
vei
sl
i
ke
l
yt
obeupwar
ds
l
opi
ng.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
3
29. A c
ompe
t
i
t
i
vemar
ke
twi
l
lt
ypi
c
al
l
ye
xpe
r
i
e
nc
ee
nt
r
yande
xi
tunt
i
lal
lac
c
ount
i
ngpr
ofit
sar
eze
r
o.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
3
30. I
nt
hel
ongr
un,ac
ompe
t
i
t
i
vemar
ke
twi
t
h1,
000i
de
nt
i
c
alfir
mswi
l
le
xpe
r
i
e
nc
eane
qui
l
i
br
i
um pr
i
c
ee
qualt
ot
he
mi
ni
mum ofe
ac
hfir
m’
sa
ve
r
a
get
ot
alc
os
t
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
3
31. Att
hee
ndoft
hepr
oc
e
s
sofe
nt
r
yande
xi
t
,
i
ti
spos
s
i
bl
et
ha
ts
omefir
msi
nac
ompe
t
i
t
i
vemar
ke
tar
emaki
nga
pos
i
t
i
vee
c
onomi
cpr
ofit
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
3
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Chapter 14/Firms in Competitive Markets  441
32. Thes
hor
t
r
uns
uppl
yc
ur
vei
nac
ompe
t
i
t
i
vemar
ke
tmus
tbemor
ee
l
as
t
i
ct
hant
hel
ongr
uns
uppl
yc
ur
ve
.
ANSWER:
FTYPE:TFDI
FFI
CULTY:
2SECTI
ON:14
.
3
33. Whe
nafir
me
xpe
r
i
e
nc
e
sze
r
opr
ofite
qui
l
i
br
i
um,t
hefir
m’
sr
e
ve
nuemus
tbes
uffic
i
e
ntt
oc
ove
ral
loppor
t
uni
t
yc
os
t
s
.
ANSWER:
TTYPE:TFDI
FFI
CULTY:2SECTI
ON:14
.
3
SHORTANSWER
1.
De
s
c
r
i
bet
hedi
ffe
r
e
nc
ebe
t
we
e
na
ve
r
a
ger
e
ve
nueandmar
gi
nalr
e
ve
nue
.Whyar
ebot
hoft
he
s
er
e
ve
nueme
as
ur
e
s
i
mpor
t
antt
oapr
ofit
maxi
mi
zi
ngfir
m?
ANSWER:
Ave
r
a
ger
e
ve
nuei
st
ot
alr
e
ve
nuedi
vi
de
dbyt
heamountofout
put
.Mar
gi
nalr
e
ve
nuei
st
hec
hangei
nt
ot
al
r
e
ve
nuef
r
om t
hes
al
eofe
ac
haddi
t
i
onaluni
tofout
put
.Mar
gi
nalr
e
ve
nuei
sus
e
dt
ode
t
e
r
mi
net
hepr
ofit
maxi
mi
zi
ngl
e
ve
lofpr
oduc
t
i
onanda
ve
r
a
ger
e
ve
nuei
sus
e
dt
ohe
l
pde
t
e
r
mi
net
hel
e
ve
lofpr
ofit
s
.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
1
2. Li
s
tandde
s
c
r
i
bet
hec
har
ac
t
e
r
i
s
t
i
c
sofape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
t
.
ANSWER:
The
r
ear
emanybuye
r
sands
e
l
l
e
r
si
nt
hemar
ke
t
.
Thegoodsoffe
r
e
dbyt
hevar
i
ouss
e
l
l
e
r
sar
el
a
r
ge
l
yt
hes
ame
.
Fi
r
msc
anf
r
e
e
l
ye
nt
e
rore
xi
tt
hemar
ke
t
.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
1
3.
Whywoul
dafir
mi
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
tal
wa
ysc
hoos
et
os
e
ti
t
spr
i
c
ee
qualt
ot
hec
ur
r
e
ntmar
ke
tpr
i
c
e
?
I
fafir
ms
e
ti
t
spr
i
c
ebe
l
ow t
hec
ur
r
e
ntmar
ke
tpr
i
c
e
,wha
te
ffe
c
twoul
dt
hi
sha
veont
hemar
ke
t
?
ANSWER:
I
tc
oul
dnots
e
l
lanymor
eofi
t
spr
oduc
ta
tt
hel
owe
rpr
i
c
et
hani
tc
oul
ds
e
l
la
tt
hehi
ghe
rpr
i
c
e
.Asar
e
s
ul
t
,
i
t
woul
dne
e
dl
e
s
s
l
yf
or
gor
e
ve
nuei
fi
ts
e
tapr
i
c
ebe
l
ow t
hegoi
ngpr
i
c
e
.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
1
4.
Us
eagr
apht
ode
mons
t
r
a
t
et
hec
i
r
c
ums
t
anc
e
st
ha
twoul
dpr
e
vai
li
nac
ompe
t
i
t
i
vemar
ke
twhe
r
efir
msar
ee
ar
ni
ng
e
c
onomi
cpr
ofit
s
.
Cant
hi
ss
c
e
nar
i
obemai
nt
ai
ne
di
nt
hel
ongr
un?Car
e
f
ul
l
ye
xpl
ai
nyourans
we
r
.
ANSWER:
I
nac
ompe
t
i
t
i
vemar
ke
twhe
r
efir
msar
ee
ar
ni
nge
c
onomi
cpr
ofit
s
,ne
w fir
mswi
l
lha
veani
nc
e
nt
i
vet
oe
nt
e
rt
he
mar
ke
t
.Thi
se
nt
r
ywi
l
le
xpandt
henumbe
roffir
ms
,i
nc
r
e
as
et
hequant
i
t
yoft
hegoods
uppl
i
e
d,anddr
i
vedown
pr
i
c
e
sandpr
ofit
s
.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
2
5.
Expl
ai
nhow afir
mi
nac
ompe
t
i
t
i
vemar
ke
ti
de
nt
i
fie
st
hepr
ofit
maxi
mi
zi
ngl
e
ve
lofpr
oduc
t
i
on.Whe
ns
houl
dt
he
fir
mr
ai
s
epr
oduc
t
i
on,andwhe
ns
houl
dt
hefir
ml
owe
rpr
oduc
t
i
on?
ANSWER:
bys
e
l
e
c
t
i
ngt
hel
e
ve
lofout
puta
twhi
c
hma
r
gi
nalr
e
ve
nuei
se
qualt
omar
gi
nalc
os
t
.
I
fMR>MC,
pr
ofitwi
l
l
i
nc
r
e
as
ei
ft
hefir
mi
nc
r
e
as
e
sQ.
I
fMR<MC,
pr
ofitwi
l
li
nc
r
e
as
ei
ft
hefir
m de
c
r
e
as
e
sQ.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
2
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Chapter 14/Firms in Competitive Markets  442
6.
Ne
wsr
e
por
t
sf
r
om t
hewe
s
t
e
r
nUni
t
e
dSt
a
t
e
soc
c
as
i
onal
l
yr
e
por
ti
nc
i
de
nt
sofc
a
t
t
l
er
anc
he
r
ss
l
aught
e
r
i
ngal
ar
ge
numbe
rofne
wbor
nc
al
ve
sandbur
yi
ngt
he
mi
nmas
sgr
a
ve
sr
a
t
he
rt
hant
r
ans
por
tt
he
mt
omar
ke
t
s
.As
s
umi
ngt
ha
t
t
hi
si
sr
a
t
i
onalbe
ha
vi
orbypr
ofit
maxi
mi
zi
ng"
fir
ms
,
"e
xpl
ai
nwha
te
c
onomi
cf
ac
t
or
sma
yi
nflue
nc
es
uc
hbe
ha
vi
or
.
ANSWER:
I
ft
hes
e
l
l
i
ngpr
i
c
ei
snots
uffic
i
e
ntt
oc
ove
rt
hevar
i
abl
ec
os
tofs
e
ndi
ngt
he
mt
omar
ke
tt
hi
sbe
ha
vi
orwoul
d
makes
e
ns
e
.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
2
7.
Us
eagr
apht
ode
mons
t
r
a
t
et
hec
i
r
c
ums
t
anc
e
st
ha
twoul
dpr
e
vai
li
nape
r
f
e
c
t
l
yc
ompe
t
i
t
i
vemar
ke
twhe
r
efir
msar
e
e
xpe
r
i
e
nc
i
nge
c
onomi
cl
os
s
e
s
.
I
de
nt
i
f
yc
os
t
s
,
r
e
ve
nue
,andt
hee
c
onomi
cl
os
s
e
sonyourgr
aph.Us
i
ngyourgr
aph,
de
t
e
r
mi
newhe
t
he
rt
hi
sfir
m wi
l
ls
hutdowni
nt
hes
hor
tr
un,orc
hoos
et
or
e
mai
ni
nt
hemar
ke
t
.Expl
ai
nyour
ans
we
r
.
ANSWER:
Thel
os
sandr
e
ve
nuear
ei
de
nt
i
fie
dont
hei
ndi
vi
dualfir
m’
sgr
aph.
Tot
alc
os
ti
se
qualt
ot
hes
um oft
hel
os
s
e
s
andr
e
ve
nue
.Thede
c
i
s
i
onaboutwhe
t
he
rt
hi
sfir
ms
hut
sdownorr
e
mai
nsi
nt
hemar
ke
tde
pe
ndsupont
hepos
i
t
i
on
ofa
ve
r
a
gevar
i
abl
ec
os
t
.I
fa
ve
r
a
gevar
i
abl
ec
os
ti
sbe
l
ow P0a
tout
putl
e
ve
lQ0,
t
hefir
m wi
l
lr
e
mai
ni
nt
hemar
ke
t
.
I
f
a
ve
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a
gevar
i
abl
ec
os
ti
saboveP0a
tout
putl
e
ve
lQ0t
hefir
m wi
l
ls
hutdowni
nt
hes
hor
tr
un.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
2
8.
Ati
t
sc
ur
r
e
ntl
e
ve
lofpr
oduc
t
i
onapr
ofit
maxi
mi
zi
ngfir
mi
nac
ompe
t
i
t
i
vemar
ke
tr
e
c
e
i
ve
s$12.
50f
ore
ac
huni
ti
t
pr
oduc
e
s
,
andf
ac
e
sana
ve
r
a
get
ot
alc
os
tof$10
.Att
hemar
ke
tpr
i
c
eof$12
.
50pe
runi
t
,t
hefir
m’
sma
r
gi
nalc
os
tc
ur
ve
c
r
os
s
e
st
hemar
gi
nalr
e
ve
nuec
ur
vea
tanout
putl
e
ve
lof1000uni
t
s
.
Wha
ti
st
hefir
m’
sc
ur
r
e
ntpr
ofit
?Wha
ti
sl
i
ke
l
yt
o
oc
c
uri
nt
hi
smar
ke
tandwhy?
ANSWER:
$2,
500
;fir
msar
el
i
ke
l
yt
oe
nt
e
rt
hi
smar
ke
ts
i
nc
ee
xi
s
t
i
ngfir
msar
ee
ar
ni
nge
c
onomi
cpr
ofit
s
.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
2
9.
Gi
vet
wor
e
as
onswhyt
hel
ongr
uni
ndus
t
r
ys
uppl
yc
ur
vema
ys
l
opeupwar
d.Us
eane
xa
mpl
et
ode
mons
t
r
a
t
eyour
r
e
as
ons
.
ANSWER:
Somer
e
s
our
c
eus
e
di
npr
oduc
t
i
onma
ybea
vai
l
abl
eonl
yi
nl
i
mi
t
e
dquant
i
t
i
e
sandfir
msma
yha
vedi
ffe
r
e
ntc
os
t
s
t
r
uc
t
ur
e
s
.Thee
xampl
epr
ovi
de
di
nt
het
e
xtf
ort
hefir
s
tr
e
as
oni
st
hemar
ke
tf
orf
a
r
m pr
oduc
t
s
.Asmor
epe
opl
e
be
c
omef
ar
me
r
s
,
t
hepr
i
c
eofl
andi
sbi
dups
i
nc
ei
t
ss
uppl
yi
sl
i
mi
t
e
d.
Ast
hepr
i
c
eoff
a
r
ml
andi
sbi
dup,
t
hec
os
tof
al
lf
ar
me
r
si
nt
hemar
ke
tr
i
s
e
s
.Thee
xampl
eus
e
dt
os
uppor
tt
hes
e
c
ondr
e
as
oni
st
hemar
ke
tf
orpai
nt
e
r
s
.Anyone
c
ane
nt
e
rt
hemar
ke
tf
orpai
nt
i
ngs
e
r
vi
c
e
s
,butnote
ve
r
yonehast
hes
amec
os
t
sbe
c
aus
es
omepai
nt
e
r
swor
kf
as
t
e
r
t
hanot
he
r
s
.
TYPE:
SDI
FFI
CULTY:3SECTI
ON:14.
3
10. I
fi
de
nt
i
c
alfir
mst
ha
tr
e
mai
ni
nac
ompe
t
i
t
i
vemar
ke
tove
rt
hel
ongr
unmakeze
r
oe
c
onomi
cpr
ofit
,
whydot
he
s
e
fir
msc
hoos
et
or
e
mai
ni
nt
hemar
ke
t
?
ANSWER:
be
c
aus
eanor
malr
a
t
eofr
e
t
ur
nont
he
i
ri
nve
s
t
me
nti
si
nc
l
ude
daspar
toft
heoppor
t
uni
t
yc
os
tofpr
oduc
t
i
on.
TYPE:
SDI
FFI
CULTY:2SECTI
ON:14.
3
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