In order to maximize profit how much output should the firm produce?

1. Suppose that installation of a new asse Show more Please Answer ALL Questions and Show any work If needed. 1. Suppose that installation of a new assembly line increases the output produced per worker. The cost per unit of output : a. will increase. b. will decrease. c. will be unchanged. 2. In a monopolistically competitive market a. a firm has market power because it produces a differentiated product. b. a firm earns large economic profits in the long run . c. there are a large number of firms d. both a and c The next question regers to the following: The graph on the left shows the short-run cost curves for a firm in a perfectly competitive market and the graph on the right shows the current market conditions in this industry. 3. In order to maximize profit how much output should the firm produce? a. 20 units b. 30 units c. 50 units d. 60 units Two stores that compete for most of the market in a town must choose their advertising levels simultaneously. The following payoff table facing the two firms smiths and Dales shows the weekly profit outcomes for the various advertising decision combinations. Use this payoff table to answer the following 2 questions . Dales advertising level Dales advertising level High Low Smiths advertising level High A $11000 $6000 B $8000 $7000 Smiths advertising level Low C $9000 7000 D $7000 $8000 4 Smiths: a. has a dominant strategy: choose a high level of advertising. b. has a dominant strategy: choose a low level of advertising. c. has a dominated strategy: choose a high level of advertising. d. has a dominated strategy: choose a low level of advertising. e. both b and c. f. both a and d. 5. The Nash Equilibrium outcome is: Cell A Cell B Cell C Cell D Show less

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