A firm with market power sells its product in two markets. The firm faces the same cost curves in both markets but faces a relatively elastic demand in one market for its product and a relatively inelastic demand in the other market for that same product. Which of the following will increase the firm’s profits?

The following questions are based on the table below, which shows a firm’s average variable cost and average total cost. Table: A Firm’s Output, Average Variable Cost, and Average Total Cost Output Average Variable Cost Average Total Cost 1 $40 $160 2 35 95 3 40 80 4 45 75 5 50 74 6 55 75 In the short run, the lowest price at which the firm will continue to produce is

The following problem refers to the graph below for a representative firm in a perfectly competitive, constant-cost industry, which shows the firm’s marginal cost (MC), average total cost (ATC), and average variable cost (AVC). The figure shows a graph with the cost curves for a perfectly competitive firm. The horizontal axis of the graph is labeled Quantity, and the vertical axis of the graph is labeled Costs. The intersection of the horizontal and vertical axis is labeled zero. Three quantities appear on the horizontal axis and are labeled, from left to right, Q sub 1, Q sub 2, and Q sub 3. Four prices appear on the vertical axis, and are labeled from bottom to top, P sub 1, P sub 2, P sub 3, and P sub 4. In the graph there are three cost curves labeled, Marginal Cost, Average Total Cost, and Average Variable Cost. The Marginal Cost curve intersects with each of the other curves and the Average Total Cost curve is always above the Average Variable Cost curve. Starting from the lower left of the graph, the Marginal Cost curve begins at a coordinate to the left of Q sub 1, and slightly above P sub 2. It curves steeply down and reaches a minimum at the coordinate Q sub 1 and P sub 1, then it curves away from the horizontal axis and moves up and to the right. When the Marginal Cost curve moves up and to the right, it intersects the other two cost curves at their minimum points; this line first intersects the Average Variable Cost curve at the coordinates Q sub 2 and P sub 2, and then it intersects the Average Total Cost curve at the coordinates Q sub 3 and P sub 3, and continues on through coordinates P sub 4. Starting above and to the right of the starting point of the Marginal Cost curve on the graph, the Average Variable Cost curve begins at a point with a coordinate of Q sub 1, and slightly above P sub 3. The curve moves gently down and to the right to the minimum point of the curve at coordinates Q sub 2 and P sub 2, which is also the point of intersection with the Marginal cost curve. The Average Variable Cost graph curves away from the horizontal axis and moves up to the right ending to the right of Q sub 3, and slightly below P sub 4. Starting near the top of the graph, above the starting point of the Average Variable Cost curve on the graph, the Average Total Cost curve begins at the coordinate for Q sub 1 on the Quantity axis. The curve moves gently down and to the right to a minimum point of the curve at the coordinate Q sub 3 and P sub 3, which is also the point of intersection with the Marginal cost curve. The Average Total Cost graph curves away from the horizontal axis and moves gently up to the right moving past Q sub 3 and P sub 4. Which of the following MUST be true in the long run?

The allocatively efficient level of output is produced in any market structure when

Which of the following indicates that a perfectly competitive firm is in long-run equilibrium?

A graph is shown with hourly wage in dollars on the vertical axis and number of workers per day on the horizontal axis. The axes are labeled from 0 to 60 in increments of 5 with vertical and horizontal reference lines drawn to form a grid. Two lines are plotted from the origin increasing linearly to the right, with the upper line labeled marginal factor cost and the lower line labeled supply of labor. A third line labeled marginal revenue product is plotted starting in the upper left at 5 workers and 55 dollars and decreasing to the right, intersecting the marginal factor cost line at 20 workers and 40 dollars and then intersecting the supply of labor line at 30 workers and 30 dollars. The graph above shows a monopsony labor market. In the absence of any regulations, which of the following represents the number of workers the firm will hire and the wage rate it will offer to those workers? 

At the current output level, a firm finds that it has the potential to increase its profit by expanding output. If P = price, MR = marginal revenue, and MC = marginal cost, which of the following must hold at the current output for this firm?

If total revenue is increasing as output increases, marginal revenue is always

Assume that a profit-maximizing, perfectly competitive firm has economic losses in the short run. If the firm continues to produce and sell its goods, then which of the following must be true?

A perfectly competitive firm finds that for the last shirt that it produces and sells, the marginal revenue is $20  and the marginal cost is $22. The firm should