1301. If the price is less than the average costs but higher than the average variable costs:

A. The firm is making a loss and will shudown in the short term
B. The firm is making a profit
C. The firm is making a loss but will continue to produce in the short term *
D. The firm is making a loss and is making a negative contribution to fixed costs

1302. If firms earn normal profits :

A. They will aim to leave the industry
B. Other firms will join the industry
C. The revenue equals total costs *
D. No profit is made in accounting terms

1303. In the long term a firm will produce provided the revenue covers:

A. Fixed costs
B. Variable costs
C. Total costs *
D. Revenue

1304. In the short term a firm will poduce provided the revenue :

A. Covers fixed cost
B. Covers variable costs *
C. Covers total costs
D. Covers revenue

1305. The profit per sale is a measure of :

A. Profit
B. Profitability *
C. Feasibility
D. Realism

1306. Total revenue equals :

A. Price plus quantity
B. Price multiplied by quantity sold
C. Price dividedby the quantity sold *
D. Price minus quantity sold

1307. If marginal revenue equals marginal cost :

A. No profit is being made
B. Total revenue equals total cost
C. Profits ar maximized *
D. Producing another unit would increase profits

1308. Price equals :

A. Total revenue quantity
B. Total revenue/quantity sold *
C. Total quantity sold
D. Total revenue /Total cost

1309. Firms in perfect competition face a :

A. Perfectly elastic demand curve *
B. Perfectly inelastic demand curve
C. Perfectly elastic supply curve
D. Perfectly inelastic supply curve

1310. In perfect competition :

A. The price equals the marginal revenue *
B. The price equals the average variable cost
C. The fixed cost equals the varible cost
D. The price equals the total cost