Which one does NOT belong?

Exercise and reference answers

Questions

1. Items

   1. Price taker
   2. AR equals price
   3. MR equals price
   4. Firm sets the price

   Reason

   A perfectly competitive firm cannot set its own price; it takes the market price as given.

   Odd item

   Firm sets the price

2. Items

   1. Total fixed cost
   2. Average revenue
   3. Marginal revenue
   4. Total revenue

   Reason

   Total fixed cost is a cost, not a revenue concept.

   Odd item

   Total fixed cost

3. Items

   1. MR = MC
   2. Output is always zero
   3. Profit maximised
   4. Best output level

   Reason

   MR equal to MC identifies the profit maximising output, which is not generally zero.

   Odd item

   Output is always zero

Instructions

Tap the item that does not belong with the rest.

Explanation