Question:

In a perfectly competitive market

A.

each firm sets its own price

B.

there are a few firms selling unique products

C.

when one firm ceases production, the market equilibrium price tends to rise

D.

none of the above. in a perfectly competitive market, firms sell homogenous products and

Answer» d. none of the above. in a perfectly competitive market, firms sell homogenous products and

Question:

A monopoly is a ________

A.

price taker

B.

price accepter

C.

price maker

D.

price neutral

Answer» c. price maker

Question:

The price of a commodity under the perfect competition isdetermined by:

A.

Buyer

B.

Seller

C.

Firm

D.

Market forces

Answer» d. Market forces

Question:

A firm may decide to shut down in the short run

A.

if profit maximization occurs at an output level where price is less than average variable cost

B.

if profit maximization occurs at an output level where price is less than average total cost

C.

profit maximization occurs at an output level where price is less than average total cost but greater than average variable cost

D.

if profit maximization occurs at an output level where price is equal to average total cost and the firm does not foresee changes to the market price in the future

Answer» a. if profit maximization occurs at an output level where price is less than average variable cost

Question:

Under perfect competition, MR curve is:

A.

Horizontal

B.

Vertical

C.

Falling

D.

Rising

Answer» a. Horizontal

Question:

A firm is able to sell any quantity of a good at a given price. The firm’s marginal revenuewill be:

A.

Greater than Average Revenue

B.

Less than Average Revenue

C.

Equal to Average Revenue

D.

Zero

Answer» c. Equal to Average Revenue

Question:

In pure competition, the marginal revenue of a firm always equals:

A.

product price.

B.

total revenue.

C.

average total cost.

D.

marginal cost.

Answer» a. product price.

Question:

The elasticity of average revenue curve of the monopolisticcompetitor, depends on

A.

The extent of product differentiation

B.

The number of firms

C.

Number of buyers

D.

Both A & B

Answer» d. Both A & B

Question:

Open market operations refer to the sale and purchase by the RBI of :

A.

Gold

B.

Foreign exchange

C.

Government securities

D.

All the above

Answer» c. Government securities

Question:

Equilibrium in the Cournot Model of Duopoly is:

A.

Unstable

B.

Stable

C.

Undefinable

D.

None of these

Answer» b. Stable