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True or False Questions Related to Marginal Revenue

True or False Questions Related to Marginal Revenue

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Characterize each of the following statements as true or false, and explain your answer.
Characterize each of the following statements as true or false, and explain your answer.

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Economics

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Marginal profit is the difference between marginal revenue and marginal cost will always equal zero at the profit maximizing activity level. the demand curve will be downward sloping. marginal revenue is less than average revenue. Solution: a. e. True The demand curve is the average-revenue curve. d.com/homework-help/economics *The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for submitting the same in lieu of their academic submissions for grades. profit maximizing firms will always sell less output higher prices than will revenue maximizing firms. If marginal revenue is less than average revenue. Given a downward sloping demand curve and positive marginal costs. a. c. True www. and explain your answer. Profits will be maximized when total revenue equals total cost. b. b. . Since average revenue is falling along a downward sloping demand curve. Marginal cost must be falling for average cost to decline as output expands. c. False The profit will be maximized when the Total revenue exceeds the Total cost. And.classof1. the profit will be zero when the total revenue equal total cost.Sub: Economics Topic: Micro Economics True or False Questions Related to Marginal Revenue Question: Characterize each of the following statements as true or false.

d. Given a downward sloping demand curve and positive marginal costs. rising. If this condition is met. True As we know that the total profit is the difference between the total revenue and the total cost.Sub: Economics Topic: Micro Economics Profit maximization involves setting marginal revenue equal to marginal cost. average cost will decline whether marginal costs are falling. www.classof1.. False Average cost will fall as output expands so long as marginal cost is simply less than average cost. For example.com/homework-help/economics *The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for submitting the same in lieu of their academic submissions for grades. Revenue maximization involves setting marginal revenue equal to zero. . revenue-maximizing firms will charge lower prices and offer greater quantities of output than will profit maximizers. or constant e.

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