Chapter 21 Flashcards
A firm produces at that output at which marginal cost = marginal revenue
all of the time
A consultant has advised Consolidated Fish, Inc that is should cut back its production in order to increase its profits. We can conclude from this that
CF’s marginal cost must be greater than the price of its product.
To find the output at which the firm maximizes its profits you must know the firms
MC
To maximize profits, a firm should product at an output up to the point where
price equals marginal cost
When MC>MR, the firm should
decrease production
If marginal cost is equal to marginal revenue
the frim should hold output constant
Marginal analysis is useful to a firm that seeks to
both maximize its profits and minimize its losses
Which statement is true 1?
The minimum point on the firms’s average variable cost curve is the shutdown point
The lowest point on the firms’s long-run supply curve is
the break-even point
The minimum possible average total cost of the computer repair shop is $40 and the minimum possible average variable cost is #30. If you operate this shop, you will shut down immediately if the equilibrium price of the computer repairs falls below
$30
Total revenue divided by output equals
price
The lowest point on a firm’s short run supply curve is a the
shutdown point
The firm’s long-run supply curve runs alon its _____ curve.
MC
Which curve tells us the output at which a firm is porductin at peack efficiency?
ATC
The firms’ break-even point occurs at an output of (graph 1)
About 58
