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· Question 7
In the break-even analysis, a lower average variable cost (AVC):
Will result in a higher break-even output
Will result in a lower break-even output
Will result in either a lower or higher break-even output
Will lower the contribution margin ratio
· Question 8
In the break-even analysis where AVC is assumed to be constant, at each output,
AVC and MC are equal
AVC is greater than MC
AVC is less than MC
AVC can be greater or less than MC
· Question 9
In the short-run, a competitive firm which seeks to maximize profit will produce:
The output where economic profit is zero
Where price and marginal cost are equal
Where total revenue and total cost curves intersect
Where price exceeds ATC by maximum amount
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