A Firm's Total Revenue

question 7

Multiple Choice

A firm's total revenue

• A)can be read off the demand curve it faces,but only if we know total cost of production
• B)can be read off the demand curve it faces,but only if we know how must output the firm sells
• C)is found by multiplying price per unit by the number of units produced and sold
• D)is equal to profit when inputs are fixed in the short run
• E)will be positive at any level of output

---

Definitions:

Substitution Effect

The economic principle that as prices rise, consumers will replace more expensive items with less costly alternatives.

Marginal Utility

The extra contentment a customer obtains by using an additional unit of a product or service.

Total Utility

The aggregate level of satisfaction or benefit that a consumer derives from consuming a particular quantity of goods or services.

Budget Constraint

The limit that the size of a consumer’s income (and the prices that must be paid for goods and services) imposes on the ability of that consumer to obtain goods and services.