1.All types of industry structures – competitive markets, monopolies, oligopolies, monopolistic competition, and cartels all strive to reach the point where MC = MR.  

• This statement is true.

• This statement is false.

• We do not have enough information to conclude if this is true or false.

• MR=MC has no practical applications and is just a theory.

2.Should non-profit firms be concerned with the MC=MR profit maximization formula?

• Non-profit firms do not need to calculate this formula and it will not provide any useful information for them.

• This formula can be useful in helping the non-profit to at least breakeven.     

• The MC=MR formula can only be used by for-profit firms.

• All of the statements above are false.

3.At the point where Marginal Cost just intersects the Average Total Cost, and assuming the price of the product or service is also at this level, then what is happening?

• The firm is earning a huge economic profit.

• You are breaking even with no economic profit whatsoever.

• The firm is enjoying economies of scale.

• The firm is dealing with diseconomies of scale.

4.Most firms belong to increasing cost industries. This means that:

• The long-run supply curve is upward sloping.  

• As the industry expands, more firms will enter the industry and will compete for the inputs that are necessary for production.  

• New firms entering the industry will bid up input resource prices (e.g. labor) and will therefore increase the per-unit costs.   

• All statements listed are true and correct.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below 1 This statement is false While it is t... View the full answer