In long run competitive equilibrium:
Every firm will earn economic profit
Every firm will incur losses
Every firm will earn only normal profit
The marginal firm will earn no profit
Correct Answer :
C. Every firm will earn only normal profit
Related Questions
Elasticity (E) expressed by the term, 1>E>0, is:
Perfectly elastic
Relatively elastic
Unitary elastic
Relatively inelastic
In Prisoners Dilemma, both the prisoners are interrogated:
Separately in different cells
Collectively in different cells
Collectively in same cell
Separately in same cell
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 ordinary demand curve is also called:
Marshallian demand curve
Hicksian demand curve
Slutsky demand curve
All the above
A decrease in demand lowers the price the most:
In the immediate run
In the short run
When the supply is perfectly elastic
When producers have sufficient time to fully adjust to the demand change
In Revealed Preference Theory, a consumer reveals preference for bundle of:
Two goods
A few goods
One good
Many goods
The cobweb model will divergent when the slope of:
Demand curve is more than supply curve
Supply curve is more than demand curve
Supply curve is equal to demand curve
None of the above
Of the following commodities, which has the lowest price-elasticity of demand?
Car
Salt
Tea
House
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
In market sharing cartel model, cartel determines the shares of:
the individuals
industry
firms
associations
The vertical distance between TVC and TC is equal to:
MC
AVC
TFC
AC
All money costs can be regarded as:
Social costs
Opportunity costs
Explicit costs
Implicit costs
Stable cobweb model is a:
Simple model
Dynamic model
Both of them
None of them
If the production function is homogeneous, the expansion path will be a straight line through the origin whose slope determines the optimal:
L/K ratio
K/L ratio
P/L ratio
P/K ratio
When elasticity of demand is greater than one (e >1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
External economies are witnessed in:
A rising supply curve
A rising demand curve
A falling supply curve
A falling demand curve
The name of the system of direct exchange is:
Price system
Barter system
Islamic economic system
Socialistic system
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 relationship between AC and MC curves depend upon the behavior of:
AP curves
MP curves
Both of them
None of them
Even in the long-run equilibrium, the pure monopolist can make abnormal profits because of:
Advertising
His low LAC
Blocked entry
High price he charges
Pure monopoly exists:
When there is a single producer
When there is a single producer without any close substitute
When there is a single producer with close substitutes
When a few producers control the industry
Karl Marx:
Led the Russian Revolution
Provided the theoretical basis for socialism(communism)
Developed his theory in response to the Great Depression of the 1930s
None of the above
In monopoly, new firms:
Can enter and exit
Partially can enter and exit
Cannot enter
None of the above
The isoquant approach is based upon:
One output
One input
Two outputs
Two inputs
Excess capacity is not found under:
Monopoly
Monopolistic competition
Perfect competition
Oligopoly
In non-constant sum game (non-zero sum game), if there are two parties then:
Both parties make better-off
Both parties make worse-off
Both parties become Neutral
Both parties can become better off or worse off
A demand schedule is shown as:
A function of price alone
A result of change in tastes
A result of increase in the size of the family
None of the above
If a straight line supply curve makes an intercept on the Y-axis, elasticity of supply is:
Equal to unity
Less than unity
More than unity
Zero
The budget constraint can be written as:
X.PX + Y.PY = 1
X.PX + Y.PY < 1
X.PX + Y.PY > 1
X.PX + Y.PY = 0
According to the principle of substitution?
Many goods have no effective substitutes
Nearly all goods have substitutes
The prices of substitute goods must be the same
Buyers will stop buying a good if its price rises