All the firms with identical costs under perfect competition well, in the long-run, earn only:
Normal profits
Abnormal profits
Differential profits
No profits
Correct Answer :
A. Normal profits
Related Questions
The marshallian demand curve includes:
Substitution Effect
Income Effect
Both substitution and income effect
None of them
A loss bearing firm will continue to produce in the short run so long as the price at least covers:
Average variable cost
Average fixed cost
Average variable cost + average fixed cost
Marginal costs
The goods sold by firms under monopolistic competition are technological as well as:
Economic complements
Economic substitutes
Economic inferiors
None of the above
If the commodity is inferior then:
Income effect is positive but substitution effect is negative
Income effect is negative but substitution effect is positive
Both income effect and substitution effect are negative
Both income effect and substitution effect are positive
Who is the author of the famous work Asian Drama: An Enquiry intro the Causes of Poverty of Nations?
Irving Fisher
J.B.Clark
J.M.Keynes
Gunnar Myrdal
The long run average cost curve is the envelope of:
SACs
LACs
SMCs
LMCs
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
In sweezy model (kinked demand curve model), the role of MC curve:
Can be ignored
Cannot be ignored
Partially be ignored
None of the above
Which of the following curves is a rectangular hyperbola?
ATC
AVC
AFC
None of the above
According to Marshal, the Law of Diminishing Marginal Utility:
Applies on both money and other commodities
Does not apply on money
Does not apply on bank money but applies on cash money
Applies on all the commodities except on money
Normally when price per unit of time falls:
Quantity demanded increases
Quantity demanded decreases
Quantity demanded remains constant
Quantity demanded becomes zero
The General Theory of Employment, Interest and Money is the major work of :
N.Kaldor
Alfred Marshal
J.M.Keynes
J.S.Duesenberry
If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)
The Modern and Neo-Keynsian Theory of Interestwas presented by:
Gunner Myrdal
A.C.Pigou
J.M.Keynes
J.R.Hicks
The Hicksian indirect utility function in the form of equation is:
x =f(P)
x =a-bp
A demand curve which is horizontal and parallel to x-axis represents:
Infinitely elastic demand
Infinitely inelastic demand
Relatively elastic demand
Relatively inelastic demand
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
The vertical demand curve for a commodity shows that its demand is:
Highly elastic
Perfectly inelastic
Fairly elastic
Moderately elastic
Price effect occurs on the higher IC in case of:
Slutsky approach
Hicksian approach
Marshallian approach
None of the above
One common definition of a luxury good is a good with income elasticity:
Greater than one
Equal to one
Less than one but more than zero
None of the above
If a new production technology for producing compact discs is developed and new firms are attracted to this field:
The supply curve will shift down or right
The supply curve will shift up or left
Both demand and supply curve shifts would occur
None of the above
Each short run average cost curve:
Has to touch the long run cost curve
Has to cross the long run cost curve
Has to lie above all points on the long run cost curve
Coincides with the long run cost curve at some point
In Prisoner Dilemma, the best choice of strategy is:
Stable
Unstable
Negative
Neutral
Under monopoly and imperfect competition MC is:
More than the price
Less than the price
Equal to the price
Less than or equal to the price
In sweezy model (kinked demand curve model), the overall increase in costs of production:
Do not effect equilibrium
Affect equilibrium
Both a and b
None of the above
In the long-run:
Fixed cost will be greater than variable cost
Variable costs will be greater than fixed costs
All costs are variable costs
All costs are fixed costs
In real life, brand loyalty is a barrier to:
Enter the new firms
Exit the new firms
Both a and b
None of the above
If a good is an inferior good then an increase in incomes of the consumers will:
Increase demand for the good
Increase supply of the good
Reduce the equilibrium price of the good
None of the above
In non-collusive oligopoly firms enter into:
Secret agreements
No secret agreements
Bad habits
None of the above
We can measure consumers surplus with the help of
TU curve
MU curve
Supply curve
None of the above