ECS 2601 ASSIGNMENT 2

1. That the firm is perfectly competitive is evident from its … 1. constant marginal revenue. 2. increasing marginal cost. 3. increasing total cost. 4. zero economic profit. 2. The maximum profit available to the firm is … 1. R20 2. R30 3. R35 4. R155 This study source was downloaded by from CourseH on :06:45 GMT -05:00 This study resource was shared via CourseH 3. The average cost for the firm in the table above ... 1. cannot be determined from the information given. 2. is upward sloping for all output values shown. 3. is downward sloping for all output values shown. 4. is constant for all output values shown. The ATC curve is U-shaped because ATC is the sum of AFC and AVC. The U-shape reflects the factors that determine the shapes of those two curves:  The AFC curve is downward sloping because as output increases, the firm spreads its fixed costs over larger and larger amounts of output.  The AVC curve is U-shaped because of decreasing marginal returns Alternative answer in case of typing error: 5. The average cost for the firm in the table above ... is U-shaped. 4. The table shows a short-run situation, which is evident from the ... 1. presence of positive costs at Q = 0. 2. constant price. 3. increasing marginal cost. 4. absence of marginal values at Q = 0. 5. The total revenue curve, consistent with the table above, is linear and … 1. upward sloping. 2. horizontal. 3. vertical. 4. downward sloping. This study source was downloaded by from CourseH on :06:45 GMT -05:00