If a commodity sold under monopoly is got free of cost, then MC will be:
Zero
Identical with the MR
A horizontal straight line
Infinite
Correct Answer :
A. Zero
Related Questions
The equilibrium of a firm is determined by the equality of MC and MR in only:
Under perfect competition
Under monopoly
Under imperfect competition
Under all the above market forms
If Cobb-Douglas production function is homogeneous of degree greater than one (n>1), then it shows:
Constant returns to scale
Increasing returns to scale
Decreasing returns to scale
None of the above
The isoquant approach is:
Classical approach
Keynesian approach
Neo-classical approach
Modern approach
Decrease in demand results in:
Upward shift in demand curve
Downward shift in demand curve
Movement on the same demand curve
No movement or shift at all
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
We can measure consumers surplus with the help of
TU curve
MU curve
Supply curve
None of the above
The relationship between price effect, income effect and substitution effect is:
P.E = S.E + I.E
S.E = P.E +I.E
I.E = P.E +S.E
S.E = P.E +2I.E
Which of the following does not have a uniform elasticity of demand at all points?
A vertical demand curve
A horizontal demand curve
A rectangular hyperbola demand curve
A downward sloping demand curve
When at a given price, the quantity demanded of a commodity is more than the quantity supplied, there will be:
An upward pressure on price
A downward pressure on price
Price will remain unaffected
All of the above
A monopolist is able to maximize his profit when:
His output is maximum
He charges a high price
His average cost is minimum
His marginal revenue is equal to marginal cost
Who developed the concept of Representative Firm?
A.C.Pigou
Alfred Marshal
J.M.Keynes
D.H.Robertson
Indifference curves are downward sloping and are drawn bowed toward the origin (convex to the origin) implying:
Consumers prefer to have less satisfaction than more of both commodities
As more and more of one commodity is obtained, less and less of the other must be given up to keep satisfaction constant
The total satisfaction obtained along an indifference curve decreases at an increasing rate
None of the above
The water diamond paradox was firstly resolved with the help of:
Labor theory of value
Individual theory of value
Producer theory of value
Consumer theory of value
If X and Y are close substitutes, a rise in the price of X will lead to:
Increase in demand for Y
Decrease in demand for Y
Decrease in demand for both X and Y
No change in demand for Y
With the expansion of output, the short run average cost curve, beyond a point, starts rising because:
Average fixed cost increases sharply
More production yields lower per unit price
The law of variable proportions applies to short run production
Sales expenses become much larger
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 the case of superior (normal) commodity, the income elasticity of demand is:
Positive
Unitary
Negative
Infinite
Theory of revealed preference is based on:
Weak orderings
Neutral orderings
Partial orderings
Strong orderings
Now-a-days in real life, we are unable to fined:
Monopoly
Perfect competition
Imperfect competition
Monopolistic competition
Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:
In ordinal approach we can separate the income effect from the substitution effect of a price change
In ordinal approach we can study the consumer behavior more closely
In ordinal approach the consumer is assumed more rational
In ordinal approach the consumer has more income
If the increase in demand is more than the increase in supply, the price will:
Rise
Fall
Remain the same
None of the above
In case of income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
The Latin term citeris paribus means:
Other things being equal
Because of this
Due to this
All the factors changes at the same rate
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
According to Chamberline, in monopolistic competition, differentiation is determined by:
Choices
Preferences
Both a and b
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
According to Saint Thomas Aquinas value is determined by God, but prices by:
Consumers
Employees
People
Labor
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
Excess capacity is not found under:
Monopoly
Monopolistic competition
Perfect competition
Oligopoly
Which of the following is not an explicit cost of production?
Wage of self-employed proprietor
Depreciation on machinery
Returns on owned capital
Cost of raw materials