b. If the average variable cost of producing any given level
of output exceeds the price at which it can be sold, then
the firm should.
c. If a firm is producing a level of output such that
that firm should output.
d. If a firm is producing a level of output such that
that firm should output.
e. The profit-maximizing level of output for a price-taking
firm is the output at which MR and MC are and the
gap between TR and TC is.
f. If a perfectly competitive firm is producing its profit-
maximizing level of output and the price of its output
rises, then MR will be than MC and the firm should
output.
4. Fill in the blanks to make the following statements correct.
a. The short-run supply curve for a perfectly competitive
firm is that firm’s marginal cost curve for levels of output
where marginal cost exceeds.
b. If a firm is producing a level of output where
but is suffering losses, we know that price is below
This firm should continue to produce as long as price
exceeds.
c. If a firm is earning profits, we know that price is above its
. There is an incentive for other firms to this
industry.
5. Fill in the blanks to make the following statements correct.
a. If existing firms in a perfectly competitive industry are
MC>MR,MC<MR,MR=