A competitive firm’s profit-maximizing

price is $15. At MC 5 MR, the output is

100 units. At this level of production, average total costs are $12. The firm’s profits are

a. $300 in the short run and long run.

b. $300 in the short run and zero in the

long run.

c. $500 in the short run and long run.

d. $500 in the short run and zero in the

long run.

 

 What would happen to revenues if a firm

in a perfectly competitive industry raised

price?

a. They would increase.

b. They would increase but profit would

decrease.

c. They would increase along with profit.

d. They would fall to zero.