I am trying to find out the answers to the following questions. Nothing in my book guides me towards the solution. I just want verification that I am doing the homework right
Problem: Jerry's Quarry sells building stone in a perfectly competitive market. At its current level of building stone production, Jerry's quarry has marginal cost equal to $45 and AVC is rising. If the market price of building stone is $50, Jerry's Quarry should :
- decrease the level of building stone production
- continue producing its current level of production
- increase its production of building of stone
- shut-down and produce no building stone.
Problem: For a perfectly competitive firm, price equals marginal revenue because:
- when another unit of good is sold, total revenue increases by the price of the good
- when another unit of good is sold, total revenue decreases by the price of the good
- when another unit of good is sold, total revenue increases by less than the price of the good
- when another unit of good is sold, total revenue increases by more than the price of the good