By reducing the prices of its products below those of its competitors, a perfectly competitive seller:
Reduces its revenues
Increases its revenues
Can sell nothing
None of the above
Correct Answer :
A. Reduces its revenues
Related Questions
The Input-Output Analysis was originated by:
W.W. Leontief
E.D.Domar
R.G.D.Allen
J.M.Keynes
The partial equilibrium model keeps other things:
Variable
Constant
Increasing
Decreasing
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
Using total revenue and total cost, a profit maximizing firm will be equilibrium at a point:
Where the gap between the two is the smallest
Where the gap between the two is the greatest
Where the two become equal
None of the above
The Law of Proportionality is another name of:
The law of diminishing marginal utility
The law of demand
The Law of Diminishing Returns
The law of supply
As the price of diamond is higher, so it has:
Higher marginal valuation for consumer
Lower marginal cost for producer
Higher marginal cost for producer
Both (a) and (c)
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
The average cost curve is a geometrical illustration of:
Hydraulic function
Cubic function
Pentagonic function
Quadratic function
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
If the factors have to be employed in a fixed ratio, then the elasticity of substitution under Leontief technology is:
One
Zero
Two
Five
In first degree price discrimination, monopolist takes away :
All of the consumer surplus
All of the producer surplus
Some part of the consumer surplus
None of them
Engel curves shows that:
How commoditys consumption rate differs at various levels of price
How commoditys consumption rate differs at various levels of satisfaction
How commoditys consumption rate differs at various levels of income
How commoditys consumption rate differs at various levels of taxes
In respect of which of the following category of goods is consumers surplus highest?
Giffen goods
Necessities
Luxuries
Prestige goods
The total utility is gained by consuming:
The last unit of a good
All the units of a good
The first unit of a good
The average unit of a good
Diseconomies of management lead to:
Decreasing returns to scale
Constant returns to scale
Increasing returns to scale
maximum returns to scale
At a point above the middle of a straight line demand curve, elasticity of demand is:
Less than one
Equal to one
More than one
Equal to infinite
After reaching the saturation point consumption of additional units of the commodity cause:
Total utility to fall and marginal utility to increase
Total utility and marginal utility both to increase
Total utility to fall and marginal utility to become negative
Total utility to become negative and marginal utility to fall
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
The Hicksian demand curve includes:
Substitution effect
Income effect
Both substitution and income effect
None of them
The game theory takes into consideration:
Reaction of rival firms
Reactions of people
No reaction of rival firms
None of the above
Under monopolistic competition, the firms compete alongwith:
Supreme powers
Discretionary powers
Low powers
None of the above
A firm under perfect competition has:
An AR curve which is a horizontal straight line
An AR curve which slopes downward
An AR curve which has a kink
An AR curve shape of which cannot be predicted
Isocost line shows the combinations of labor and capital where a firms budget is:
Fully spent
Half spent
Partially spent
Nearly spent
A firm will be in equilibrium when the lowest isocost is:
Tangent to the lowest isoquant
Tangent to the given isoquant
Above the given isoquant
Below the given isoquant
The line from the origin to a point on an isoquant shows:
The wages employment ratio
The capital rent ratio
The rent labor ratio
The capital labor ratio
Conditions of perfect competition ensure:
That each firm can influence the price
No single firm can influence the price
Any single firm can influence the supply condition in the market
Any single firm can influence both supply and price in the market
In dominant price leadership model, the small firms are like:
monopolistic firms
monopoly
competitive firms
none of the above
Which of the following is assumed to be constant when drawing a demand curve?
Consumer tastes
Prices of inputs
Technology
Number of sellers
From the resource allocation view point, perfect competition is preferable because:
The firms operate at excess capacity levels
There is a whole variety of output produced
There is no restriction on entry and exit of firms
There is no idle capacity
Income-elasticity of demand is expressed as:
% change in quantity demanded % change in income
% change in income % change in quantity demanded
Change in income Change in quantity demanded
None of the above