Firms: Equilibrium - Question Bank

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Question Bank - Economics

Firms: Equilibrium

Q1. Click on the point in the diagram below which would give the optimum level of allocative efficiency (Click on the image to select your answer)

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Q2. Click on the point in the diagram below which would give normal profit for a monopolist. (Click on the image to select your answer)

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Q3. A grocery store should close at night if the (Select one answer) (a) variable costs of staying open are less than the total revenue due to staying open (b) total costs of staying open are less than the total revenue due to staying open (c) variable costs of staying open are greater than the total revenue due to staying open (d) total costs of staying open are greater than the total revenue due to staying open

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Q4. At what point will firms be maximising the level of profit they are making? (Select one answer) (a) Where total cost is at a maximum above total revenue (b) Where marginal cost is equal to marginal revenue (c) Where marginal cost equals average revenue (d) Where the price is as high as possible

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Q5. At what point will the firm be maximising the level of revenue they receive? (Select one or more answers) (a) Where marginal revenue equals 0 (b) Where average revenue equals zero (c) Where marginal cost equals marginal revenue (d) Where the slope of the total revenue curve is 0

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Q6. At which of the points given below will the price elasticity of demand be equal to one? (Select one answer) (a) Where average revenue equals zero (b) Where marginal revenue equals 0 (c) At the midpoint of the demand curve between its intersection with the x and y- axes. (d) Where marginal cost equals marginal revenue

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Q7. Click on the point in the diagram below which represents the profit maximising level of output. (Click on the image to select your answer)

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Q8. Click on the point in the diagram below which represents the revenue maximising level of output. (Click on the image to select your answer)

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Q9. Click on the point in the diagram below which represents the price a monopoly would charge. (Click on the image to select your answer)

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