4004 Economics chapter 4 Quiz 2

a firm maximises its total profit where

• MR = AR

• MR = MC

• AR = AC

• TR = TC

a firm maximises its total profit at a point where MR = MC, at this point

• profit earned from last unit (i.e. marginal profit) is zero

• profit earned from last unit (i.e. marginal profit) is maximum

• average profit is zero

• average profit is maximum

marginal profit earned from various units is as given below

Unit 1 = (-) Rs.20

Unit 2 = (-) Rs.10

Unit 3 = Rs.15

Unit 4 = Rs.30

Unit 5 = Rs.25

Unit 6 = Rs.20

find total profit and average profit at 6 units

• Rs.20 ; Rs.3.33

• Rs.90 ; Rs.15

• Rs.60 ; Rs.10

• Rs.120 ; Rs.20

If a firm is producing 50 units and at this stage the firm is able to earn total profit of Rs.750. Find firms total revenue given its total cost to be Rs.1,450.

• Rs.700

• Rs.2,200

• Rs.14

• Rs.44

If a firm is producing 50 units and at this stage the firm is able to earn total profit of Rs.750. Find firms average revenue given its total cost to be Rs.1,450.

• Rs.700

• Rs.2,200

• Rs.14

• Rs.44

at profit maximizing level (output 150 units) a firm's average revenue (AR) is given to be Rs.35 and average cost (AC) is given to be Rs.23. Find firms average profit and total profit ?

• Rs.1,500 ; Rs.12

• Rs.1,800 ; Rs.12

• Rs.12 ; Rs.1,800

• Rs.58 ; Rs1,800

at equilibrium where MR = MC, a firm earns ________ marginal profit

• maximum

• zero

• minimum

• negative

where marginal utility is zero, total utility is ________ likewise where marginal profit (i.e. MR - MC) is zero, total profit is ________

• maximum ; minimum

• minimum ; maximum

• maximum ; maximum

• minimum ; minimum

in ________ market form, AR = MR

• monopoly

• Oligopoly

• monopolistic competition

• perfect competition

AR = MR, this means

• additional output can be sold at existing market price

• additional output can be sold by reducing prices

• additional output cannot be sold

• additional output can be sold by increasing prices