16. If variable cost rises from $60 to $100 as output increases from 15 to 20 units, the marginal cost of the twentieth unit

a) is $100

b) is $5

c) is $40

d) is $8

17.Suppose Guild produces 5,000 guitars per year. Its average total cost is $90, and its fixed cost is $250,000. What is its variable cost?

a) $250,000

b) $450,000

c) $25,000

d) $200,000

18.If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the value of price elasticity of demand is

a) -1/3

b) -2 1/3

c) -1/4

d) -3

19.So long as P > AVC, the competitive firm's short-run supply curve is equal to:

a) AVC

b) MC

c) P

d) none of these.

20.At the profit maximizing level of output for a monopolist:

a) P = AR and AR = AC

b) P > MC and MR = MC

c) P = MC and MR > MC

d) P = MR and AC = MC

21.Holding supply conditions constant, the costs of regulation fall wholly on producers when:

a) E_P = 1

b) E_P => 1

c) E_P = ?

d) E_P = 0

22.A 100% markup on cost is equivalent to a markup on price of:

a) 25%

b) 33%

c) 50%

d) 100%

23.A 25% markup on price is equivalent to a markup on cost of:

a) 25%

b) 33%

c) 50%

d) 100%

24.When E_P = -3, the optimal markup on cost is:

a) 100%

b) 67%

c) 50%

d) 33%

25.When E_P = -2, the optimal markup on price is:

a) 100%

b) 67%

c) 50%

d) 33%

Use the following table to answer the next question Quantity Total of output cost 0 $ 50 10 85 20 150 30 220 40 305 50 455 26. If the market price is $8.50, what are the profit-maximizing output and profit? a) output = 40; profit = $35 b) output = 40; profit = $0 c output = 0; profit = -$50 d) output and profit cannot be determined because marginal revenue cannot be calculated 27. If a firm charges a price of $6 for a product with a cost of $5, the markup on cost equals: a) 67% b) 33% c) 20% d) 50% 28. If a firm charges a price of $5 for a product with a cost of $3, the markup on price equals: a) 60% b) 150% c) 250% d) 40% 29. If the optimal markup on price is 50%, the optimal markup on cost is: a) 100% b) 75% c 50% d) 25%