If we measure the elasticity of demand with the help of the average and marginal revenue, the formula is:
Ed = AR/ (AR- MR)
Ed = MR/ (AR-MR)
Ed = AR/(MR-AR)
Ed = AR/ MR
Correct Answer :
A. Ed = AR/ (AR- MR)
Related Questions
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 income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
The competitive equilibrium leads to:
The firms producing with excess capacity
The firms producing at their minimum costs
Firms producing at a cost higher than the minimum
Some firms producing under decreasing costs and others under increasing costs
In cournot model firms:
Cannot make price adjustments
Can make price adjustments
Can adjust number of customers
None of the above
The main objective of the firm is to:
Face losses
Avoid losses
Bear losses
Make economic decisions
An economic theory is :
An axiom
A proposition
A hypothesis
A tested hypothesis
In Prisoner Dilemma, the best choice of strategy is:
Stable
Unstable
Negative
Neutral
In monopolistic competition, the real differentiation in products is due to difference in:
Style
Consumer
Cost
Material
In real life, brand loyalty is a barrier to:
Enter the new firms
Exit the new firms
Both a and b
None of the above
Under monopolistic competition, the products sold by the firms are:
Economic substitutes
Technical substitutes
Both a and b
None of the above
The low cost price leader will charge:
higher prices
zero prices
lower prices
specific prices
A country is advised to devalue (reduce external value of) its currency only when its exports face:
Inelastic demand in foreign markets
Elastic demand in foreign markets
Unit elastic demand in foreign markets
None of the above
Profits of a firm will be calculated taking into account the units produced and the difference between:
Real cost and money cost
Variable cost and fixed cost
Average cost and average revenue
Marginal cost and average cost
The spending of money by the producer to influence consumers is an example of:
Derived demand
Joint demand
Demand creation
Compressed demand
The behavior of MC curve is determined by the behavior of the:
AC curve
SC curve
TC curve
None of the above
The demand of the necessities is:
More elastic
Less elastic
Unit elastic
Zero elastic
The difference between the average total cost and average variable cost as output increases will:
Increases
Remains the same
Diminishes
Zero
With firms having cost differences under perfect competition, a firm, which earns normal profit in the long-run is called:
An optimum firm
A representative firm
An oxford firm
A marginal firm
Total profits are maximized at the point where:
TR equals TC
The TR curve and the TC curve intersect such that TR and TC lie at the same point
The TR curve and the TC curve are parallel and TC exceeds TR
The TR curve and the TC curve are parallel and TR exceeds TC
MC is given by:
The slope of the TVC curve
The slope of the TVC curve but not the slope of the TC curve
The slope of the TC curve but not by the slope of the TVC curve
Either the slope of the TVC curve or the slope of the TC curve
The production process is:
Consuming goods and services
Transforming inputs into outputs
Wasting goods and services
Buying goods and services
In 1776, a famous book An enquiry into the nature and causes of the wealth of nation was written by:
J.S.Mill
Adam Smith
Robert Malthus
David Ricardo
The isoquant which are generated by CES (constant elasticity of substitution) production function are always:
Positively sloped
Negatively sloped
Concave to the origin
None of the above
The costs faced by the firm against fixed factors are:
Total costs
Fixed costs
Variable costs
Marginal costs
The concept of product differentiation was firstly introduced by:
Smith
Kaldor
Sraffa
Marshal
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 monopoly, when average revenue curve falls:
MR constant
MR rises
MR falls
MR is zero
If two goods have same marginal utility for a consumer then:
He will consume only one of them
He will consume equal quantities of them
He will be willing to pay the same price for each of them
The total utility gained from each of them is equal
In the range of excess capacity, the average costs are:
Maximum
Minimum
Equal to one
Equal to zero
If the commodity is normal then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite