micro economics true/ false and fill in the blank and formulas

What is the formula for Total Revenue?

Total Revenue = Price x Quantity

What is the formula for Marginal Revenue?

Marginal Revenue = Change in Total Revenue ÷ Change in Quantity

What is the formula for Profit?

Profit = Total Revenue − Total Cost

What is the formula for Total Cost?

Total Cost = Total Fixed Cost + Total Variable Cost

What is the formula for Average Total Cost?

Average Total Cost = Total Cost ÷ Quantity

What is the formula for Average Variable Cost?

Average Variable Cost = Total Variable Cost ÷ Quantity

What is the formula for Average Fixed Cost?

Average Fixed Cost = Total Fixed Cost ÷ Quantity

What is the rule for profit maximization?

Profit is maximized when Marginal Revenue equals Marginal Cost

In a perfectly competitive market, Marginal Revenue equals what?

Marginal Revenue equals Price

Firms in perfect competition are called what?

Price takers

What curve represents the supply curve of a perfectly competitive firm?

The Marginal Cost curve above Average Variable Cost

What is the shutdown rule?

A firm continues producing if Price is greater than or equal to Average Variable Cost

When does a firm shut down in the short run?

A firm shuts down when Price is less than Average Variable Cost

What is the profit maximizing condition for a monopoly?

Marginal Revenue equals Marginal Cost

In a monopoly, Marginal Revenue is what compared to Price?

Marginal Revenue is less than Price

What shape is the monopoly demand curve?

The demand curve is downward sloping

What is the formula for the Lerner Index?

(Price − Marginal Cost) ÷ Price

Under perfect competition, Marginal Revenue equals Price.

True

A monopolist always has Marginal Revenue equal to Price.

False

Profit is maximized when Marginal Revenue equals Marginal Cost.

True

Firms in perfect competition are price takers.

True

A monopoly produces more output than a competitive market.

False

A monopolist can charge different prices under price discrimination.

True

The supply curve of a competitive firm is the Marginal Cost curve above Average Variable Cost.

True

A firm shuts down when Price is less than Average Variable Cost.

True

Under monopoly, Marginal Revenue is below the demand curve.

True

Profit is maximized when __________ equals __________.

Marginal Revenue equals Marginal Cost

In perfect competition, Marginal Revenue equals __________.

Price

Total Revenue equals __________ multiplied by __________.

Price × Quantity

Average Total Cost equals __________ divided by __________.

Total Cost ÷ Quantity

A firm produces if Price is greater than or equal to __________.

Average Variable Cost

Profit equals __________ minus __________.

Total Revenue − Total Cost

In a monopoly, Marginal Revenue is __________ than Price.

Less

Deadweight loss occurs because monopolies produce __________ output than competitive markets.

Less