O are not included in production decisions QUESTION 12 Retur

O are not included in production decisions. QUESTION 12 Returns to scale is a O a short run concept. O a long run concept. O concept that applies in both the long run and the short run. O concept that deperds on cost calculation QUESTION 13 If at the current level of production a firm finds that MR# MC, then! ?the revenue is maximized. O the cost is the lcast. the current level of production gives the firm the highest profit. O the firm should shut down. QUESTION 14 If a firm (either competitive, monopoly or oligopoly) is producing some output level O\" according to the profi-maximizing rule and the shutdown condition is not satisfied, then whick of the Bolowing is me ifthe firm is making some profit, it is the highest possible profit. O if the firm is making some loss, it is the lowest possible loss 0 the firm should keep producing O All of the above. QUESTION 15 Click Save and Submit to save and submit. Click Save Al Answers to save all answers.

Solution

12. correct option: C
explanation: return to scale is a long run concept because, in short run, change in output is based on change in factor proportion, but in long run it is associated with change in scale of production.

13. correct option : C.
explanation: when MR is more than MC, the firm is producing too little and can increase profit by increasing output and when MR is less than MC ,the firm is producing too much and can increase profit by decreasing output. hence when firm firm produce when MR is equal to MC, it is utilising its resources efficiently and making maximum profits.

14. correct option : D

explanation: a firm maximise its profit and minimizes its losses at point where MR is equal to MC (called profit maximising rule).it means that firm is able to recover its variable cost , it should keep producing.