AB13220 Lecture6/7

What is the formula for Total Revenue?

• P x Q

• P / Q

• P + Q

• P - Q

Answer explanation

Price times the Quantity of Output

What? = Total Revenue divided by Output

​ (a)   is the ​ (b)   from selling another unit of output.

• Marginal Revenue
• extra revenue
• Marginal Cost
• Marginal Benefit
• Total Revenue
• Revenue
• extra cost
• Total Cost
• Total Benefit

The formula for Marginal Revenue is....?

• ΔTR/Q

• ΔTR x ΔQ

• ΔTR/ΔQ

• ΔQ/ΔTR

Answer explanation

The change in total revenue divided by the change in output

The competitive firm ​ (a)   profits at the quantity of output where ​ (b)   equals ​ (c)  

• maximises
• price
• marginal cost
• minimises
• revenue
• marginal revenue

Draw the graph

Profits are maximised where?

• MR = P

• P = ATC

• MR = MC

• MC = AVC

Which of these is NOT true?

• A sunk cost cannot be recovered.

• A sunk cost is the opposite of an opportunity cost.

• Fixed costs are fixed to opportunity costs.

• Fixed costs are sunk in the short-run.

In the long run all costs are?

• Fixed

• Totalled

• Opportunity

• Variable

Firms are always trying to do what?

• Make stuff?

• Maximise Profit?

• Maximise Utility?

• Eat Cheese?