A monopolist has control over the price he charges for his product. He will be able to maximize his profit by:
Lowering the price, if the demand curve is elastic
Lowering the price, if the demand curve is inelastic
Rising the price, if the demand curve is elastic
None of the above is applicable
Correct Answer :
A. Lowering the price, if the demand curve is elastic
Related Questions
According to Leontief technology, there:
Is only one technique of production
Are few techniques of production
Are many techniques of production
Are two techniques of production
Marginal cost is always:
Less than the average cost
More than the average cost
Equal to the average cost at minimum point
Never equal to the average cost
If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:
Perfectly elastic
Elastic
Unitary elastic
Inelastic
Cross-demand curve shows:
The effect of a change in price of X on its demand
The effect of a change in price of X on the demand for Y
The effect of a change in price of Y on its demand
None of the above
Whenever a group of monopolistic competitors attains equilibrium, the firms in this group usually:
Charge different prices, but produce identical outputs
Produce different outputs, but charge identical prices
Charge different prices, and produce different outputs
None of the above
In the theory of firm, Chamberline presented the idea of:
Rising cost
Falling cost
Rising input
Falling input
Cross-elasticity of demand or cross-price elasticity between two complements will be:
Negative
Positive
Infinite
Zero
Who wrote Mathematical Analysis for Economists?
J.P.Lewis
R.G.D.Allen
Paul A.Samuelson
E.D.Domar
Under the perfect competition, the transportation cost:
Is considered to be negligible and thus ignored
Is considered to be vital for the calculation of total cost
Is charged along with the price of the commodity
None of the above
The low cost price leader will charge:
higher prices
zero prices
lower prices
specific prices
Which of the following oligopoly models is concerned with the maximization of joint profits?
Price leadership model
Bertrands model
Collusive model
Edgeworths model
Which one of the following has been the most influential work of F.H.Knight?
Freedom and Reform
The Green Revolution
Economic Integration
Risk ,Uncertainty and Profit
Elasticity of supply means change in supply due to change in:
Price of the commodity
Conditions of supply
Taste of the consumer
Demand for the commodity
The effects according to which people use those goods which are concerned with distinctive standard of living are:
Bandwagon effects
Snob effects
Veblen effects
Steven effects
Monopolistic firm can fix:
Both price and output
Either price or output
Neither price nor output
None of the above
The kinked demand curve comes into being where:
Proportional demand curve (PDC) and individual demand curve (IDC) intersect each other
Proportional demand curve (PDC) and individual demand curve (IDC) are parallel to each other
Proportional demand curve (PDC) and individual demand curve (IDC) repel each other
None of the above
In short-run, in monopolistic competition, a firm earns:
Normal profits
Abnormal profits
No profits
All of the above
If the marginal utility is divided by the price of the commodity then it is called:
Real Marginal Utility
Gross Marginal Utility
Weighted Marginal Utility
Money Marginal Utility
Who wrote Economics of Imperfect Competition?
E.H.Chamberlin
Joan Robinson
E.A.G.Robinson
J.M.Keynes
If X and Y are close substitutes, a rise in the price of X will lead to:
Increase in demand for Y
Decrease in demand for Y
Decrease in demand for both X and Y
No change in demand for Y
The proportional demand curve in monopolistic competition (also in kinked demand curve model), is like industry demand curve in:
Monopolistic competition
Imperfect competition
Monopoly
Perfect competition
Indifference curves are downward sloping and are drawn bowed toward the origin (convex to the origin) implying:
Consumers prefer to have less satisfaction than more of both commodities
As more and more of one commodity is obtained, less and less of the other must be given up to keep satisfaction constant
The total satisfaction obtained along an indifference curve decreases at an increasing rate
None of the above
The optimum level of output in long run takes place where:
LAC = LMC
SAC = LMC
SAC =MC
SAC =LAC
When a consumer is in equilibrium then slope of indifference curve is:
Equal to the slope of budget line
Greater than the slope of budget line
Smaller than the slope of budget line
Parallel to the slope of budget line
In modern theory, LAC = LMC after the attainment of:
Maximum optimal scale
Average optimal scale
Minimum optimal scale
None of the above
Two policy variables, product and selling activities in the theory of firm was introduced by:
Chamberline
Sraffa
Carl marx
Robinson
Plumbing and pipe-fitting require many of the same skills. If the wage paid to pipe-fitters increased then the effect on the market for plumbers would probably be:
An increase in demand
A decrease in demand
An increase in supply
A decrease in supply
Supply of commodity is a:
A stock concept
A flow concept
Both stock and flow
None of the above
In monopolistic competition, the firms follow:
Exotic behavior
Sympathetic behavior
Myopia behavior
Regular behavior
The average cost curve is a geometrical illustration of:
Hydraulic function
Cubic function
Pentagonic function
Quadratic function