In microeconomics, the short run is defined as what?

The table above shows the production function for a firm.

What is true for the firm as it increases variable inputs from 1 to 2?

The table above shows the production function for a firm.

What is true for the firm as it increases variable inputs from 3 to 4?

The table above shows the production function for a firm.

What is true for the firm as it increases variable inputs from 5 to 6?

What causes diminishing marginal product?

As the total product or output of a firm increases, the gap or difference between the average variable cost curve and the average total cost decreases because the firm’s

Which of the following is always true of the relationship between average and marginal costs?

Marginal costs usually decrease and then increase. What causes marginal costs to increase?

Why is the average total cost curve usually U-shaped?

What causes a decrease in the long-run average total cost curve?

If a firm is earning positive accounting profits, what must be true?

A firm is definitely earning economic profit when total revenue

A firm is earning normal profit when total revenue

To maximize profits, firms should produce

A firm produces in a perfectly competitive industry where price is greater than marginal costs and average variable cost. What should the firm do to maximize profits?

A firm produces in a perfectly competitive market that is currently at long-run equilibrium. If the market demand increases in the short run, what will happen in the long run?

A firm produces in a perfectly competitive market that is currently at long-run equilibrium. If the market demand decreases in the short run, what will happen in the long run?

As output increases, total revenue increases as well. Over that range of production, marginal revenue must be

Allocative efficiency occurs in a market with no externalities when

Assume a firm is producing in a perfectly competitive market. What is the shape of the industry short-run demand curve and a typical firm’s demand curve?

A firm produces in a perfectly competitive market that is a constant-cost industry. Initially, the market is at long-run equilibrium at a market price of P₁. Then the market demand increases. What will the market price be in the long run for this industry?

A firm produces in a perfectly competitive market that is an increasing-cost industry. Initially, the market is at long-run equilibrium at a market price of P₁. Then the market demand increases. What will the market price be in the long run for this industry?

A firm produces in a perfectly competitive market that is a decreasing-cost industry. Initially, the market is at long-run equilibrium at a market price of P₁. Then the market demand increases. What will the market price be in the long run for this industry?

What is the productively efficient quantity for a firm?

Which of the following is true of firms in a perfectly competitive industry?

Assume that a firm is producing in a perfectly competitive industry. If the firm is profit- maximizing but price is below the average variable cost, what should the firm do in the short run?

Assume a firm is producing in a perfectly competitive industry. If the firm is profit-maximizing but the price is greater than average variable cost while less than the average total cost, what should the firm do in the short run?