Economics Chapter on Profit and Costs
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Questions and Answers

What is defined as the excess of total revenue over total cost?

  • Total cost
  • Total revenue
  • Total loss
  • Total profit (correct)

    • At which output level does the firm break even?

  • When TC = 0
  • When TC = TR (correct)
  • When TC < TR
  • When TR is maximized

    • What occurs beyond the output level OM?

  • Total revenue is maximized
  • Total cost remains constant
  • Profit reaches its peak
  • Total cost overtakes total revenue (correct)

    • What is the range of profitable output for a firm?

    <p>From OL to ON</p> Signup and view all the answers

    How can a firm find the profit-maximizing output?

    <p>By identifying the largest vertical difference between TR and TC</p> Signup and view all the answers

    What is the shape of the total cost curve after a certain point?

    <p>Concave downward</p> Signup and view all the answers

    What happens to profit as output increases past the output level OM?

    <p>Profit starts to decrease</p> Signup and view all the answers

    What characterizes the total revenue (TR) curve?

    <p>It is positively sloped</p> Signup and view all the answers

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