Perfect competition

What is the goal of a firm?

• to make profits

• to maximize profits

• to maximize revenue

• none of the above

Total Revenue (minus) Explicit and Implicit cost =

• Accounting Profit

• Economic Profit

• Economic Cost

• Total Profit

Select all that apply: Rent would be an example of a

• Implicit cost

• Explicit Cost

• Variable cost

• Fixed cost

Fixed Costs are only fixed in the

• Long run

• Short run

• Period where there is neither a profit or a loss

• none of the above

Marginal =

• Next

• Additional

• Profit

MC crosses the ATC and AVC

• where you draw it

• at its lowest point

• where MR=MC

• None of the above

What is the profit maximizing condition?

• MR = D

• MR = MC

• MC = D

• D = Profits

The image above shows a firm making

• Economic Profit

• Economic loss

• Breaking even

• Shutting down

Should the following firm shutdown?

• Yes

• No

• Not enough information present

Select all that apply: When should a firm decide to shutdown?

• When their demand curve is below AVC

• When their MR curve is below AVC

• When the price is below the AVC

• When the MC is below the AVC