AP Microeconomics: Unit 3: Production, Cost, and the Perfect Competition Model

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Question 4 · Unit 3: Production, Cost, and the Perfect Competition Model · standard

A price-taking firm has rising marginal cost and can vary output continuously. At its positive MR = MC output of 50 units, price is $14, AVC is $10, and ATC is $18. This output maximizes operating profit, and fixed costs are unavoidable in the short run. What should the firm do now?A. Shut down because price is below ATC.B. Produce and earn a $200 economic profit.C. Produce and incur a $200 economic loss.D. Produce and incur a $700 economic loss.

Question 14 · Unit 3: Production, Cost, and the Perfect Competition Model · standard

With capital fixed, a firm's total daily output with 0, 1, 2, 3, and 4 workers is respectively 0, 9, 21, 30, and 36 units. With the hiring of which worker does diminishing marginal product first appear?A. The first workerB. The second workerC. The fourth workerD. The third worker

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