Econ COSTS AND REVENUE

The MC curve slopes the way it does in the short run because of........

• Diseconomies of scale

• Economies of scale

• Rising total revenue

• Falling average fixed cost

• The law of diminishing marginal returns

The difference between average total cost and average variable cost falls as output rises because of

• Falling marginal cost

• Falling average fixed cost

• Rising marginal cost

• Rising average fixed costs

• The law of diminishing marginal returns

The minimum point of the short run AC curve will always cross the......

• Marginal cost curve

• Average variable cost curve

• Average fixed cost curve

• Total cost curve

• Total fixed cost curve

In economics the difference between the short run and the long run is......

• In the long there is at least one fixed factor of production

• All factors of production are variable in the long run

• The short run only lasts for the first 6 months

• In the short run all factors of production are fixed

• In the short run all factors of production are variable

Marginal revenue can be defined as

• revenue received from selling one extra unit of production

• price x quantity

• revenue - costs

• total revenue divided by quantity

• the change in total revenue

A firm reduces the price and total revenue rises. This means the good must be....

• PED elastic

• PED inelastic

• YED elastic

• XED inelastic

• PES elastic

Supernormal profits are maximised when.....

• AR=AC

• MR>MC

• MR=MC

• AR>AC

• TR is maximised

Normal profit is where.....

• AR>AC

• MR=MC

• MR>MC

• AR=AVC

• AR=AC

The shutdown point in the short run is where.......

• AR=AC

• MR=MC

• AR<AVC

• AR>AVC

• AR=AVC

A firm in the long run will shutdown when

• AR=AC

• AR>AC

• MR=MC

• AR<AC

• AVC=AFC