#1
What is profit maximization?
Maximizing total revenue
Minimizing total cost
Maximizing the difference between total revenue and total cost
Minimizing profit margin
#2
What is the formula for calculating total revenue?
Price per unit multiplied by quantity sold
Price per unit minus total cost
Price per unit divided by quantity sold
Total cost divided by quantity sold
#3
What is the primary goal of profit maximization?
To increase market share
To maximize revenue
To minimize costs
To maximize the difference between revenue and costs
#4
Which of the following is NOT a characteristic of perfect competition?
Many buyers and sellers
Homogeneous products
No barriers to entry
Firms have market power
#5
What is the profit-maximizing output level for a monopolist?
Where marginal cost equals marginal revenue
Where average total cost is minimized
Where marginal cost equals average total cost
Where marginal revenue equals average total cost
#6
What is the relationship between marginal cost and marginal revenue at the profit-maximizing output level for a perfectly competitive firm?
Marginal cost is greater than marginal revenue
Marginal cost equals marginal revenue
Marginal cost is less than marginal revenue
Marginal cost is unrelated to marginal revenue
#7
Which of the following is a characteristic of monopolistic competition?
Many buyers and sellers
Identical products
Firms have some control over price
Perfect information among buyers and sellers
#8
What does the term 'Economic Profit' refer to?
The total revenue minus explicit costs
The total revenue minus explicit and implicit costs
The total revenue minus implicit costs
The total revenue minus fixed costs
#9
What is the profit-maximizing level of output for a perfectly competitive firm in the long run?
Where total revenue equals total cost
Where marginal revenue equals marginal cost
Where average total cost is minimized
Where total revenue is maximized
#10
Which of the following is a characteristic of oligopoly?
Many small firms
One seller dominating the market
Few large firms
Homogeneous products
#11
In economics, what is the 'marginal revenue'?
The additional revenue gained from selling one more unit of a good
The total revenue divided by the quantity sold
The revenue earned from the last unit sold
The revenue earned from selling the most expensive unit
#12
What is the effect of a decrease in variable costs on a firm's profit-maximizing output level in the short run?
Increase in output level
Decrease in output level
No change in output level
Increase in fixed costs
#13
What is the 'shut-down point' for a firm operating in the short run?
Where total revenue equals total cost
Where average total cost equals average variable cost
Where marginal revenue equals marginal cost
Where total revenue is maximized
#14
What is the key assumption underlying the profit maximization theory in economics?
Firms aim to maximize revenue
Firms have perfect information
Firms aim to maximize profit
Firms operate in a monopoly market
#15
What is the relationship between price elasticity of demand and marginal revenue for a monopolist?
They are directly proportional
They are inversely proportional
They are unrelated
Marginal revenue is always zero for a monopolist
#16
What is the impact of a decrease in fixed costs on a firm's profit-maximizing output level in the short run?
Increase in output level
Decrease in output level
No change in output level
Decrease in variable costs
#17
What happens to a monopolist's profit if there is an increase in competition?
Profit increases
Profit decreases
Profit remains unchanged
Profit becomes negative