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4

A monopolist is able to maximize his profit when:

A. His output is maximum

B. He charges a high price

C. His average cost is minimum

D. His marginal revenue is equal to marginal cost

Correct Answer :

D. His marginal revenue is equal to marginal cost


Related Questions

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Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?

A. MC =AC and P

B. MC = AC and P=MR

C. P =MC and P

D. MC=MR and P =AR= ATC

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A monopolist has control over the price he charges for his product. He will be able to maximize his profit by:

A. Lowering the price, if the demand curve is elastic

B. Lowering the price, if the demand curve is inelastic

C. Rising the price, if the demand curve is elastic

D. None of the above is applicable

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Any expansion in output by a firm in the short period will always reduce the:

A. Average variable cost

B. Average fixed cost

C. Both average fixed and variable cost

D. None of the above

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The number of sellers in duopoly is:

A. A few

B. Four

C. Two

D. Very large

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If there are many firms producing similar but differentiated products, the competition is generally said to be:

A. Oligopoly

B. Pure competition

C. Perfect competition

D. Monopolistic competition

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Social costs equal private costs when:

A. Marginal cost is zero

B. Total cost is zero

C. External costs are zero

D. Average costs are zero

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The long run average cost curve is:

A. Cup-shaped

B. Oval-shaped

C. Saucer-shaped

D. Glass-shaped

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A typical demand curve cannot be:

A. Convex to the origin

B. Concave to the origin

C. A straight line

D. Rising upwards to the right

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According to Marginalists, the price of any commodity is determined by:

A. Marginal usefulness

B. Marginal cost

C. Both of them

D. None of them

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Variable cost includes the cost of:

A. Hiring the building for the factory

B. Purchasing heavy machines

C. Paying the manager of the factory

D. Paying the laborers

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Cross-elasticity of demand or cross-price elasticity between two complements will be:

A. Negative

B. Positive

C. Infinite

D. Zero

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Who wrote Economics of Imperfect Competition?

A. E.H.Chamberlin

B. Joan Robinson

C. E.A.G.Robinson

D. J.M.Keynes

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If as a result of an increase in prices, total outlay (expenditures) on a commodity decreases, its price-elasticity of demand is:

A. Perfect elastic (infinitely elastic)

B. Relatively elastic (greater than one elasticity)

C. Unit elastic

D. Relatively inelastic (less than one elasticity)

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Government planners play a central role in allocating resources:

A. Only under socialism(communism)

B. Only under capitalism

C. Under both (a) and (b)

D. None of the above

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Which of the following is assumed to be constant when drawing a demand curve?

A. Consumer tastes

B. Prices of inputs

C. Technology

D. Number of sellers

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Consumer surplus is the difference between

A. Price demanded and price paid

B. Price quoted and price actually paid

C. Price that a consumer is willing to pay and the price actually paid

D. None of the above

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In the theory of firm, Chamberline presented the idea of:

A. Rising cost

B. Falling cost

C. Rising input

D. Falling input

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According to current thinking, the law of diminishing returns applies to:

A. All fields of production

B. Agriculture

C. Mining

D. Manufacturing

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In monopoly, new firms:

A. Can enter and exit

B. Partially can enter and exit

C. Cannot enter

D. None of the above

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Market allocation fundamentally relies upon:

A. A system of relative prices

B. A belief that employees work for the good of society

C. Government ownership of the means of production

D. Moral incentives to encourage productive efficiency

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If a good is an inferior good then an increase in incomes of the consumers will:

A. Increase demand for the good

B. Increase supply of the good

C. Reduce the equilibrium price of the good

D. None of the above

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Labor Saving Technological Progress can be defined as:

A. Technological progress that causes to raise the marginal product of capital and labor in the same proportion

B. Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor

C. Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital

D. None of the above

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The costs faced by the firm against fixed factors are:

A. Total costs

B. Fixed costs

C. Variable costs

D. Marginal costs

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If regardless of changes in its price, the quantity demanded of a commodity remains unchanged, then the demand curve for the commodity will be:

A. Horizontal

B. Vertical

C. Positively sloped

D. Negatively sloped

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The low cost price leader will charge:

A. higher prices

B. zero prices

C. lower prices

D. specific prices

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According to Leontief technology, there:

A. Is only one technique of production

B. Are few techniques of production

C. Are many techniques of production

D. Are two techniques of production

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In Prisoner Dilemma, the best choice of strategy is:

A. Stable

B. Unstable

C. Negative

D. Neutral

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Elasticity of supply means change in supply due to change in:

A. Price of the commodity

B. Conditions of supply

C. Taste of the consumer

D. Demand for the commodity

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In Edgeworth model, if price falls below competitive price, the demand is:

A. More than maximum output

B. More than minimum output

C. Less than maximum output

D. Less than minimum output

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Using total revenue and total cost, a profit maximizing firm will be equilibrium at a point:

A. Where the gap between the two is the smallest

B. Where the gap between the two is the greatest

C. Where the two become equal

D. None of the above