1. In the long run, when an increase in the quantity of output decreases average total cost, this is called: -economies of scale. -diseconomies of scale. -constant economies to scale. -minimum average total cost.

2.

An oligopolist's production decision affects:

• its profits.

• the profits of other firms in the market.

• the prices charged by each firm.

• All of these statements are true.

3. The profit-maximizing level of output for any firm in a perfectly competitive market is to produce where:

• MC = MR.

• MC > MR.

• MC < MR.

• MR = P*.