Question:

For a monopolist, marginal revenue is always less than price because

A.

as output increases, the price of all units must fall to sell the additional unit

B.

because at lower prices, profit margins fall

C.

in order to sell additional quantities, the additional units much be sold at a lower price

D.

because monopolist is a price maker

Answer» a. as output increases, the price of all units must fall to sell the additional unit

Question:

When AC is more than AR, what is the firm doing?

A.

Making supernormal profit

B.

Incurring loss

C.

Having breakeven point

D.

Minimising losses

Answer» b. Incurring loss

Question:

The equilibrium price in the short period is called:

A.

Normal price

B.

Abnormal price

C.

Market price

D.

Bogus price

Answer» c. Market price

Question:

Which of the following condition are met in the long run equilibriumof the monopolistic competitor earning only normal profit

A.

MC=AC

B.

P=AC

C.

P=MR

D.

P=MC

Answer» b. P=AC

Question:

Kinked demand curve is found under:

A.

Monopoly

B.

Oligopoly

C.

Perfect competition

D.

Duopoly

Answer» b. Oligopoly

Question:

Which of the following statement is FALSE with regard to marginal utility

A.

marginal utility is the utility derived from last unit

B.

as consumption increases marginal utility goes on diminishing

C.

at saturation point marginal utility is zero

D.

marginal utility increases at a diminishing range

Answer» d. marginal utility increases at a diminishing range

Question:

According to Keynes, saving is:

A.

Private virtue but not social virtue

B.

Private and social virtue

C.

Is neither private virtue nor social virtue

D.

Is either social virtue or private virtue

Answer» a. Private virtue but not social virtue