$2.00

$1.60

$1.80

$2.20

$2.60

$3.20

$4.00

$6.00

$8.00

$0

$60

$120

$180

$240

$300

$360

$420

$480

$540

$600

-

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

5. Explain in words why a profit-maximizing firm will not choose to produce at a quantity where marginal

cost exceeds marginal revenue.

6. A firm’s marginal cost curve above the average variable cost curve is equal to the firm’s individual supply

curve. This means that every time a firm receives a price from the market it will be willing to supply the

amount of output where the price equals marginal cost. What happens to the firm’s individual supply

curve if marginal costs increase?

7. If new technology in a perfectly competitive market brings about a substantial reduction in costs of

production, how will this affect the market?

8. A market in perfect competition is in long-run equilibrium. What happens to the market if labor unions

are able to increase wages for workers?
{"source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "creator": "PDFMiner", "moddate": "2022-12-07T14:23:05-06:00", "producer": "Prince 14.2 (www.princexml.com)", "file_size_mb": 26.99, "file_type": ".pdf", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T15:37:44.339247", "file_name": "Microeconomics3e.pdf", "total_pages": 597, "batch_upload": true, "creationdate": "2022-12-07T14:15:44-06:00", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "title": "Principles of Microeconomics 3e"}