7. In order to maximize profits, a perfectly competitive firm will continue producing until: a) it...

 

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7. In order to maximize profits, a perfectly competitive firm will continue producing until: a) it utilizes its full production capacity. b) the marginal cost equals the market price. c) the average cost is minimized. d) its total sales revenue is maximized. e) the profit per-unit is at its highest possible point. 8. The supply curve of a perfectly competitive firm is: a) the portion of the marginal cost curve above the marginal revenue curve. b) the portion of the marginal cost curve above the average cost curve. c) the portion of the marginal cost curve above the average variable cost curve. d) the portion of the average cost curve above the average variable cost curve. e) the same as the average variable cost curve. 9. Suppose that demand for and supply of a commodity in a market are shown on a graph with price on the vertical axis and quantity on the horizontal axis. The y-intercept of a linear demand curve is equal to $30. The equilibrium price and quantity are $20 and 300 units respectively. What is the total consumer surplus in the market? a) $2,000 b) $1,500 c) $9,000 d) $3,000 10. If the long-run market supply curve in a perfectly competitive industry is downward-sloping, then the industry: a) is a constant-cost industry. b) is an increasing-cost industry. c) exhibits constant returns to scale. d) exhibits increasing returns to scale. e) is a decreasing-cost industry. 7. In order to maximize profits, a perfectly competitive firm will continue producing until: a) it utilizes its full production capacity. b) the marginal cost equals the market price. c) the average cost is minimized. d) its total sales revenue is maximized. e) the profit per-unit is at its highest possible point. 8. The supply curve of a perfectly competitive firm is: a) the portion of the marginal cost curve above the marginal revenue curve. b) the portion of the marginal cost curve above the average cost curve. c) the portion of the marginal cost curve above the average variable cost curve. d) the portion of the average cost curve above the average variable cost curve. e) the same as the average variable cost curve. 9. Suppose that demand for and supply of a commodity in a market are shown on a graph with price on the vertical axis and quantity on the horizontal axis. The y-intercept of a linear demand curve is equal to $30. The equilibrium price and quantity are $20 and 300 units respectively. What is the total consumer surplus in the market? a) $2,000 b) $1,500 c) $9,000 d) $3,000 10. If the long-run market supply curve in a perfectly competitive industry is downward-sloping, then the industry: a) is a constant-cost industry. b) is an increasing-cost industry. c) exhibits constant returns to scale. d) exhibits increasing returns to scale. e) is a decreasing-cost industry.

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