Question

Plastic and Co manufactures industrial plastic containers. As petroleum prices fall, the price of plastic materials also falls. As a result,
a: Plastic and Co’s marginal cost curve will shift.
b: The market price for the plastic containers will rise, other things equal.
c: The fixed cost curve for Plastic and Co would shift downward.
d: Average cost curve of plastic containers will shift upward.

When ________, a competitive firm will produce and earn economic profits.

a: marginal revenue is rising
b: marginal costs are decreasing
c: marginal revenue is above average costs
d: marginal revenue = average total cost = marginal costs

Answer 1

The plastic and CO’s marginal cost curve will shift