A. all firms must make economic profits.
B. there are no fixed factors of production
C. a firm can vary all inputs, but it cannot change the mix of inputs it uses.
D. a firm can shut down, but it cannot exit the industry

A. a period where the law of diminishing returns does not hold.
B. at least one fixed factor of production and firms neither leaving nor entering the industry
C. all inputs being variable
D. no variable inputs – that is all of the factors of production are fixed

A. Produces less output, charges higher prices and earns economic profits.
B. Produces less output, charges lower prices and earns only a normal profit
C. produces more output, charges higher prices and earns economics profits
D. produces less output, charges lower prices and earns economic profits

A. more; more
B. fewer; less
C. more; less
D. no; infinite

A. how much to spend on advertising?
B. how much of each input to use?
C. What price to charge
D. none of these

A. the MR and MC curves
B. the AC and AR curves
C. the AC and MC curves
D. the MR and AR curves

A. the additional profit the firms earns when it sells an additional unit of output
B. the difference between total revenue and total cost
C. The ratio of total revenue to quantity.
D. the added revenue that a firm takes in when it increases output by one additional unit.

A. Dq/DTFC
B. TFC – q
C. TFC/q
D. q/TFC

A. marginal rate of factor substitution
B. marginal rate of substitution
C. law of diminishing marginal returns.
D. marginal rate of production

A. slope up to the right
B. are U-shaped
C. slope down to the right
D. slope down to the right and then level off.