Short Answer Questions—please answer the following questions
a. If the marginal revenue is less than the marginal cost, what should a profit maximizing company do?
b. In a perfectly competitive graph, how does one calculate the economic profit?
c. What it is the shutdown point in a perfectly competitive firm?
d. Briefly what is the difference between economies of scale and diseconomies of scale? Why is it important to the firm?
e. Given the following total cost function TC(q) = 1000 + 13q. Find the fixed cost, variable cost, average total cost, and the marginal cost. How do you know that these costs are in the short-run? Explain.
