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A firm’s production function is given by Q = KL.  The marginal products of labor and capital are, respectively, MPL = K and MPK = L.  The wage rate of labor is w = $10 and the rental rate of capital is r = $20. The firm spends exactly $1000 in the most efficient way possible.  How much output can the firm produce?

The profit-maximizing price for a perfectly competitive firm would be

As a monopolist’s demand curve becomes more inelastic,

Which of the following does not represent a profit-maximizing condition for a firm operating in a perfectly competitive industry?

In equilibrium, what will consumer surplus be?

At a consumer’s interior optimum solution, which of the following will not necessarily hold true?

Which of the following will not be true of a perfectly competitive market?

A monopolist faces linear inverse demand P = a – bQ and constant marginal cost, c.  The term a increases by amount Δa.  By how much does the monopolist’s optimal price increase?

Suppose that we illustrate demand and supply with quantity on the horizontal axis and price on the vertical axis. Which of the following statements is false?

Which of the following statements best illustrates the law of supply?