At high prices, demand is likely to be:
More elastic
Less elastic
Unit elastic
Perfectly inelastic
Correct Answer :
A. More elastic
Related Questions
If the commodity is normal then fall in price will result in:
Increase the quantity demanded
Fixed the quantity demanded
Decrease the quantity demanded
None of the above
The difference between average cost and average revenue is:
Total profit
Average profit
Net profit
Marginal profit
In the long-run competitive equilibrium:
There is tendency for firms to enter but not leave the industry
Firms have no tendency either to enter or to leave the industry
Some firms may enter while the others may leave the market even after the equilibrium of the industry
Entry or exit of the firms cannot be predicted
Any expansion in output by a firm in the short period will always reduce the:
Average variable cost
Average fixed cost
Both average fixed and variable cost
None of the above
Under conditions of perfect competition, price in the long-run is equal to:
Minimum of average variable cost
Minimum of marginal cost
Minimum of average fixed cost
Minimum of average cost
In substitution effect, we:
Move to another indifference curve
Move along given indifference curve
Move to a higher indifference curve
Move to a lower indifference curve
The CES production function shows:
Decreasing return to scale
Increasing return to scale
Constant return to scale
None of the above
In the case of superior (normal) commodity, the income elasticity of demand is:
Positive
Unitary
Negative
Infinite
The average cost curve is a geometrical illustration of:
Hydraulic function
Cubic function
Pentagonic function
Quadratic function
The MC curve cuts the AVC and ATC curves:
At different points
At the falling parts of each
At their respective minimums
At the rising parts of each
Marginal utility (MU) always:
Increases
Decreases
Remains constant
None of above
In the long run:
All factors can be used in different proportions
Management can be re-organized
A firm can experience returns to scale
All of the above
Contraction in demand occurs when:
Price increases and demand decreases
Price increases but demand also increases
Price remains constant but demand falls down
Price falls down but demand remains constant
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
Market demand curve is:
Vertical summation of individual demand curves
Upward summation of individual demand curves
Downward summation of individual demand curves
Horizontal summation of individual demand curves
LMC represents change in LTC (long-run total cost) due to producing an additional unit of a good while the fixed and variable factors:
Cannot be changed
Can be changed
Can partially be changed
None of the above
Which of the following formula determine the income elasticity of demand?:
Proportionate change in demand Proportionate change in price
Proportional change in the purchase of Y Proportional change in the price of X
Proportionate change in demand Proportionate change in income
Proportionate change in demand Proportionate change in price
Price discrimination is possible:
When elasticities of demand in different markets are the same at the ruling price
When elasticities of demand are different in different markets at the ruling price
When elasticities cannot be known
When elasticities of demands are zero in different markets at the rulling price
Moving down along a linear demand curve:
Demand becomes less elastic
Elasticity does not change
Demand has unitary elasticity
Demand becomes more elastic
According to translog production function, elasticity of substitution is:
Greater than one
Less than one
Zero
Equal to one
The vertical demand curve for a commodity shows that its demand is:
Highly elastic
Perfectly inelastic
Fairly elastic
Moderately elastic
Of the following, which one is a characteristic of monopolistic competition?
Standardized product
Differentiate product
Two firms
No entry
To attain maximum profits during short-run a firm should produce the output that will:
Yield maximum total revenue
Minimize marginal cost
Maximize marginal cost
Equate marginal revenue with marginal cost
In which case the elasticity shown by the different points of a curve is the same?
A straight line curve
A downward sloping demand curve
A rectangular hyperbola demand curve
None of the above
In case of monopoly, both AR and MR fall, but MR falls:
Double to that of AR
1/2 to that of AR
2/3 to that of AR
Four times to that of AR
In Revealed Preference Theory, a consumer reveals preference for bundle of:
Two goods
A few goods
One good
Many goods
The standard form of demand function is:
Q = a- bP
Y = a- bP
Q = a+ bP
The income consumption curve (ICC) is the locus of points of consumer equilibrium resulting:
Only when the price of commodity X changes
Only when the price of commodity Y changes
Only when the consumers income is varied
None of the above
Total variable cost curve:
Steps downwards at first and then upwards
Steps upwards, then remains constant and then falls
Steps downwards
None of the above
At the point where the straight line from the origin is tangent to the TC curve, AC is:
Maximum
Minimum
Equal
Lower