Marginal Revenue

1. There are 100 dog kennels in Atlanta. An economist studying the pricing behavior of dog kennels tells you that she is limiting her analysis to a time period that does not allow for any new dog kennels to enter the industry or for any established dog kennels to leave the industry. The time period this economist referred to is the

A market period.

B industry run.

C long run.

D short run.


2. If Microsoft is earning a rate of return greater than the return necessary for the business to continue operations in the long run, then

A total costs exceed total revenue.

B total costs exceed a normal rate of return.

C the normal rate of return is zero.

D the firm is earning an economic profit.


3. As long as price is sufficient to cover ________, the firm is better off by operating rather than by shutting down. (Points : 1)

A marginal cost

B average fixed cost

C average variable cost

D marginal revenue

4. If revenues exceed ________, operating profit is ________. (Points : 1)

A total cost; negative

B fixed cost; positive

C variable cost; negative

D variable cost; positive

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