Question:

In the long run, a competitive firm can earn

A.

Normal profit

B.

Super normal profit

C.

Loss

D.

Any of the above

Answer» a. Normal profit

Question:

Equilibrium price is determined under perfect competition by

A.

The market demand

B.

The market supply

C.

The interaction between market demand and market supply

D.

None of the above

Answer» c. The interaction between market demand and market supply

Question:

When AR passes through minimum point of AVC, it is called:

A.

Breakeven point

B.

Shutdown point

C.

Normal profit point

D.

Supernormal profit point

Answer» b. Shutdown point

Question:

At the optimum short-run level of output, the firm will be

A.

Maximizing total profit

B.

Minimizing total losses

C.

Either maximizing total profit or minimizing total losses

D.

Maximizing profit per unit

Answer» c. Either maximizing total profit or minimizing total losses

Question:

Which of the following statements is true, regarding the revenues of a firm under perfectcompetition

A.

the marginal revenue and the average revenue are equal to the price

B.

the marginal revenue is greater than the average revenue

C.

the marginal revenue is greater than the total revenue

D.

the total revenue is less than the average revenue

Answer» a. the marginal revenue and the average revenue are equal to the price

Question:

The Working Group for the Revision of Wholesale Price Index Number headed by :

A.

Prof. Abhijit Sen

B.

Kelkar

C.

Ahluwalia

D.

Tarapore

Answer» a. Prof. Abhijit Sen

Question:

Third degree price discrimination occurs when the monopolist chargesdifferent prices for the same commodity in different

A.

Markets

B.

places

C.

continents

D.

countries

Answer» a. Markets

Question:

The three primary characteristics of a perfectly competitive market are

A.

the firms\ products are unique, they set their own price and can freely enter and exit the market

B.

the firms\ products are homogenous, the firms are price takers and can freely enter and exit the market

C.

the firms\ products are homogenous, the firms are price takers and there are barriers to entry into the market

D.

the firms\ products are unique, they are price takers and there are no barriers to entry in the market

Answer» b. the firms\ products are homogenous, the firms are price takers and can freely enter and exit the market

Question:

The market structure which number of sellers is small with interdependence is called

A.

Perfect competition

B.

Monopoly

C.

Monopolistic competition

D.

Oligopoly

Answer» d. Oligopoly

Question:

The short-run supply curve of the perfectly competitive firm is given by

A.

the rising portion of its MC curve over and above the shut-down point

B.

the rising portion of its MC curve over and above the break-even point

C.

the rising portion of its MC curve over and above the AC curve

D.

the rising portion of its MC curve.

Answer» a. the rising portion of its MC curve over and above the shut-down point