A. Labour costs are a high percentage of total costs
B. Demand for the final product is price inelastic
C. It is relatively easy to substitute capital for labour
D. There are many substitutes for the final product
Related Mcqs:
- If as the quantity produced increase a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will ?
A. be flat (horizontal)
B. slope upward
C. slope downward
D. be U-shaped. - Demand for labour is more likely to be wage inelastic if ?
A. Wages are a small proportion of total costs
B. Demand for the final product is price elastic
C. It is easy to replace labour
D. Capital is a good substitute for labour - If both marginal cost and marginal revenue increase, a firm ?
A. Should increase output
B. Should reduce output
C. will require further information on how to respond
D. Should not change output - An upward shift in marginal cost _____ output and an upward shift in marginal revenue ______ output?
A. reduces; reduces
B. reduces; increases
C. increases; increases
D. increases; reduces - If a marginal revenue exceeds marginal cost, a monopolists should?
A. increase should
B. decrease output
C. keep output the same because profits are maximized when marginal revenue exceeds marginal cost
D. raise the price - When marginal revenue equals marginal cost ?
A. Total revenue equals total cost
B. There is the biggest positive difference between total revenue and total cost
C. There is the biggest negative difference between total revenue and total cost
D. Profits are Zero - If the marginal revenue is less than the marginal cost then to profit maximise a firm should ?
A. Reduce output
B. Increase output
C. Leave output where it is:
D. Increase costs - If marginal revenue equals marginal cost ?
A. No profit is being made
B. Total revenue equals total cost
C. Profits are maximised
D. Producing another unit would increase profits - If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost the firm could increase profit if it ?
A. decreased production
B. maintained production at the current level
C. temporarily shut down.
D. increased production - If the total product of two workers is 80 and the total product of 3 workers is 90 then the average product of the third worker is ________ and the marginal product of the third worker is _________?
A. 160; 270
B. 10; 30
C. 10; 3.33
D. 30; 10
