Marginal Revenue

Suppose that a firm has the opportunity to employ a new machine that will increase production by five units and will cost $10 to purchase. If each unit of output can be sold for $5, then the: a) marginal revenue product of the machine is less than its cost, and the firm should not take advantage of the opportunity. b) marginal product of the machine is exactly equal to the price of output, and the firm should therefore take advantage of the opportunity. c) marginal revenue product of the machine is equal to $25, so the firm should take advantage of the opportunity d) marginal revenue product of the machine is equal to $5, so the firm should take advantage of the opportunity. ... click for more

Market price and Marginal Revenue in Imperfect Competition

In the situation of imperfect competition, the relation between market price P and marginal revenue MR for each supplying firm is that: a) P is less than MR at all or most output levels. B) P is greater than MR at all or most output levels. c) P is the same as MR at all output levels d) P is either less than MR at particular output levels or the same as MR e) none of the above, since P is not related to MR.

Profit-maximizing Equilibrium

Under profit-maximizing equilibrium, which of the following will not be equal to the other three? a) the marginal revenue product of input X. b) The price of input X. c) the marginal cost of input X. d) the marginal product of input X. e) all will be equal.

Marginal Revenue - Demand Curves

Marginal Revenue becomes negative for a firm faced with a downward-sloping demand curve when: a) the demand price becomes negative b) the demand elasticity drops from elastic to inelastic c) total revenue is maximized d) the loss on previous units is at is maximum e) both b and c

#14 Long-Run Equilibrium - Competitive markets

in a competitive market with a downward sloping demand curve, a tax that increases the fixed cost of every firm will: a) reduce the number of firms supporting long run equilibrium b) increase the long-run equilibrium price. c) not cause the number of firms supporting long-run equilibrium to change d) answers a and b e) answers b and c