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4

All the firms with identical costs under perfect competition well, in the long-run, earn only:

A. Normal profits

B. Abnormal profits

C. Differential profits

D. No profits

Correct Answer :

A. Normal profits


Related Questions

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4

The equilibrium of a firm is determined by the equality of MC and MR in only:

A. Under perfect competition

B. Under monopoly

C. Under imperfect competition

D. Under all the above market forms

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4

Excess capacity is concerned with the:

A. V-shaped traditional cost curves

B. S-shaped traditional cost curves

C. Modern cost curves

D. U-shaped traditional cost curves

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4

Any straight line supply which cuts the x-axis will have:

A. Zero elasticity

B. An elasticity greater than one

C. Unitary elasticity of supply

D. An elasticity less than one

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4

Monopoly means:

A. Where there is no retail trade and every thing is sold on wholesale basis

B. Where trading of a particular commodity is controlled exclusively by one firm

C. Where many people sell only one commodity

D. A form of business organization in which only single proprietorship exists

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4

The entry of new firms in cournot model is:

A. Banned

B. Free

C. Partially free

D. Allowed

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4

If Cobb-Douglas production function is homogeneous of degree greater than one (n>1), then it shows:

A. Constant returns to scale

B. Increasing returns to scale

C. Decreasing returns to scale

D. None of the above

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4

Which of the following formula determine the income elasticity of demand?:

A. Proportionate change in demand Proportionate change in price

B. Proportional change in the purchase of Y Proportional change in the price of X

C. Proportionate change in demand Proportionate change in income

D. Proportionate change in demand Proportionate change in price

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4

If X and Y are close substitutes, a rise in the price of X will lead to:

A. Increase in demand for Y

B. Decrease in demand for Y

C. Decrease in demand for both X and Y

D. No change in demand for Y

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4

In monopolistic competition, the firms follow:

A. Exotic behavior

B. Sympathetic behavior

C. Myopia behavior

D. Regular behavior

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4

The relationship between AC and MC curves depend upon the behavior of:

A. AP curves

B. MP curves

C. Both of them

D. None of them

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4

In the long run average costs curve, a firm can change:

A. Labour

B. Capital

C. Both of them

D. None of them

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4

When a consumer reached at the point of saturation then marginal utility (MU) is:

A. Negative

B. One

C. Positive

D. Zero

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4

In Prisoners Dilemma, both the prisoners are interrogated:

A. Separately in different cells

B. Collectively in different cells

C. Collectively in same cell

D. Separately in same cell

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4

The sufficient condition of firms equilibrium requires:

A.

B.

C.

D. none of the above

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4

In the short-run, in which one of the following situations would a competitive seller close down (shut-down)?

A. When he cannot produce at an economic profit

B. When price falls short of average variable cost at every level of output

C. When price falls short of average fixed cost at every level of output

D. When price falls short of average total cost at every level of output

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4

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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4

In short run, a firm can change its:

A. Total production

B. Fixed production

C. Variable production

D. None of the above

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4

The cost curves of the firm shift due to changes in:

A. Input prices

B. Technological innovations

C. Both of them

D. None of them

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4

The point on which the average cost is minimum in a firm, short run average cost curve will also be the minimum cost point on the firms long-run average cost curve. This is true:

A. Always

B. Never

C. When LAC is falling

D. Only at that level of output when LAC is at its minimum

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4

Who first used the term Quasi-Rent?

A. David Ricardo

B. Alfred Marshal

C. J.S.Mill

D. Karl Marx

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4

Who developed the concept of Representative Firm?

A. A.C.Pigou

B. Alfred Marshal

C. J.M.Keynes

D. D.H.Robertson

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4

If the price of a product falls then quantity demanded tends to increase ceteris paribus because:

A. The MU/P ratio has decreased

B. Of the income and substitution effects

C. Consumers tend to feel poorer when prices fall

D. When price falls the demand curve shifts right

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4

In the case of substitutes, the cross demand curve slopes

A. Downwards to the right

B. Upwards to the right

C. Backwards to the right

D. Inwards at the bottom

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4

Robbins definition of economics was criticised by:

A. Alfred Marshal

B. Adam Smith

C. J.B.Clark

D. Hicks, Longe and Durbin

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4

A firm is a sum of persons who convert:

A. Goods into services

B. Output into inputs

C. Inputs into outputs

D. None of the above

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4

The Hicksian indirect utility function in the form of equation is:

A. x =f(P)

B. x =a-bp

C.

D.

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4

The cournot model is a model of:

A. Instable equilibrium

B. Stable equilibrium

C. Constant equilibrium

D. Fluctuating equilibrium

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4

In monopolistic competition, the firms have to face:

A. Same cost conditions

B. Different cost conditions

C. Same price conditions

D. Same products conditions

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4

Monopolistic firm can fix:

A. Both price and output

B. Either price or output

C. Neither price nor output

D. None of the above

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4

The necessary condition of firms equilibrium requires:

A. dR/dQ + dC/dQ = 0

B. dR/dQ - dC/dQ = 0

C. dC/dQ - dR/dQ = 0

D. dR/dQ > dC/dQ > 0