If under perfect competition, in the short period, price does not cover the average cost completely, the firm will even then stay in the market as long as:
The average fixed cost is covered
The average variable cost is covered
Some profit is earned
The entrepreneurs enjoy producing
Correct Answer :
B. The average variable cost is covered
Related Questions
The slope of marshallian demand curve is:
Upward
Vertical
Downward
Horizontal
Cross-elasticity of demand or cross-price elasticity between two complements will be:
Negative
Positive
Infinite
Zero
In the theory of firm, Chamberline presented the idea of:
Rising cost
Falling cost
Rising input
Falling input
Total fixed costs are:
In monopoly, new firms:
Can enter and exit
Partially can enter and exit
Cannot enter
None of the above
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 slutsky demand curve includes:
Income effect
Price effect
Substitution effect
None of the above
Under monopolistic competition, the firms compete alongwith:
Supreme powers
Discretionary powers
Low powers
None of the above
With an increase in income, consumer is expected to buy more of:
An inferior good
A giffen good
A normal(or superior) good
None of the above
The fundamental choices that a society must make about the use of its resources include:
How much to produce
How to produce
How to distribute
All of the above
For the equilibrium of the firm and the industry in the short period in a competitive market, the condition is:
P = AC
P = MC
AC = MC
MC = TR
Which is not a central problem of an economy?
What to produce
How to produce
How to maximize private profit
For whom to produce
According to law of Equi-Marginal Utility when price of commodity falls then we bought:
More units
Less units
Same units
Zero units
The imaginary differentiation is attributed to difference in:
Style
Salesmanship
Locality
All of these
Price elasticity of demand can be measured in the following way:
Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity
Change in quantity demanded of a commodity divided by change in price of that commodity
Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity
None of that commodity
The maximization of output subject to cost requires equilibrium at the:
Lowest isoquant
Lowest isocost line
Highest isoquant
Highest isocost line
With the change in the factor prices, the slope of the expansion path will:
Not change
Also change
Increase
Decrease
In Nash Equilibrium:
Each player has a dominant strategy
No players have a dominant strategy
At least one player has a dominant strategy
Players may or may not have dominant strategies
The concept of period refers to:
A specific duration of time
A varying duration of time
A duration of time which permits necessary adjustments
A period with calculated intervals
The game theory is concerned with:
Perfect competition
Imperfect competition
Price discrimination
Duopoly and oligopoly
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
In monopolistic competition, if a firm lowers its price, the rival firms will:
Also lower their prices
Increase their prices
Show no reaction
None of the above
Competitors in monopolistic competition have full control over:
The price of their product
Product quality
The shape of the market demand curve
The elasticity of product substitution
Robbins definition of economics was criticised by:
Alfred Marshal
Adam Smith
J.B.Clark
Hicks, Longe and Durbin
If Marginal Utility (MU) is zero, then total utility is:
Maximum
Minimum
Infinite
Not measureable
If the slope of the isoquant is equal to the slope of isocost, then isoquant is:
Concave to the origin
Convex to the origin
Tangent to the origin
None of the above
All of the following are capital resources except:
Warehouses
Buildings
Dams
Share of stock
Capital Saving Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
The marginal revenue of a perfectly competitive firm is:
Equal to the prices of its products
Positively related to output
Negatively related to output
Always higher than marginal cost
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