AP Microeconomics Practice Test: Firm Production, Costs, and Revenues

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Question 7 questions

Time 8 minutes

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1. The long-run average cost curve

2. A monopoly with a straight, downward-sloping demand curve has a marginal revenue curve that is

3. Marginal cost always intersects average variable cost at

4. In an oligopoly market, firms

5. Relative to a competitive product market with the same costs, a monopoly can be expected to involve

6.

Company A and Company B are competing firms that are deciding whether or not to expand their operations. The payoff matrix provided shows the profit to be earned (expressed in thousands) from any decision that is made. Based on the data provided

7. Consider a profit-maximizing firm in a perfectly competitive market with several sellers and several buyers (i.e., the firm is a "price taker" of the goods it sells and a "price taker" of the hourly wages it pays its workers). If a technological innovation made by someone in this firm were to significantly raise the firm's marginal physical product (but not that of any other firm's), then this innovation would