In monopolistic competition (also in kinked demand curve model), a firm sells the amount where:
Individual demand curve (IDC) is equal to proportional demand curve (PDC)
Individual demand curve (IDC) is greater than proportional demand curve (PDC)
Individual demand curve (IDC) is less than proportional demand curve (PDC)
None of the above
Correct Answer :
A. Individual demand curve (IDC) is equal to proportional demand curve (PDC)
Related Questions
Under monopolistic competition, in long-run there is:
Ban on exit
Ban on entry
Free entry
Free entry and exit
In discriminating monopoly (price discrimination), the cost of production in two markets are:
Different
Same
Zero
None of the above
The long run total cost is attained by:
LMC.Q
AC.Q
LC.Q
LAC.Q
The utility function u = f(x) is based upon :
Two goods
Few goods
One good
Zero goods
The Law of Equi-Marginal Utility states:
per income rupee
If cross-elasticity of one commodity for another turns out to be zero, it means they are:
Close substitutes
Good complements
Completely unrelated (independent goods)
None of the above
The elliptical isoquant represents the:
Economic combinations of labor and capital
Uneconomic combinations of labor and capital
Both a and b
None of the above
When the level of optimal factor combination is over and more labor is employed with the fixed plant, the efficiency of labor:
Increases
Decreases
Remains constant
Becomes zero
4.The Law of Diminishing Returns according to the modern view, applies to:
Agriculture
All fields of production
Industry
Services
A monopolist has control over the price he charges for his product. He will be able to maximize his profit by:
Lowering the price, if the demand curve is elastic
Lowering the price, if the demand curve is inelastic
Rising the price, if the demand curve is elastic
None of the above is applicable
The cost that a firm incurs in purchasing or hiring any factor of production is referred to as:
Explicit cost
Implicit cost
Variable cost
Fixed cost
If the demand for good is less elastic and government levied a tax per unit of output, the price per unit for the firm would:
Rise by the amount of the tax
Rise by more than the amount of the tax
Rise by less than the amount of the tax
Remain the same
In market sharing cartel model, cartel determines the shares of:
the individuals
industry
firms
associations
Human wants are:
Thousands
Few
Innumerable
Hundreds
Which of the following has more elastic demand curve?
A commodity without substitutes
A commodity with substitutes
A commodity on which a small fraction of income is spent
A commodity the use of which cannot be postponed
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
The income consumption curve (ICC) is the locus of points of consumer equilibrium resulting:
Only when the price of commodity X changes
Only when the price of commodity Y changes
Only when the consumers income is varied
None of the above
Used cars are sold in:
Perfectly competitive international market
Perfectly competitive national market
Imperfect international market
Imperfect local market
The game theory concentrates on:
Gaming
Strategic decisions
Both a and b
None of the above
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
If the prices of goods rise then:
The real income of consumer falls
The real income of consumer rises
The real income of a consumer remains constant
The real income of consumer becomes zero
In monopolistic competition, the aim of the firm is to:
Maximize output
Minimize output
Minimize cost
Maximize profit
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
Economics is a:
Exact science
Inexact science
Pure science
All of the above
The production function can convey to a firm:
The cost of producing any given output
The various combinations of input that could be employed in production of any given quantity of output
The various combinations of input that should be used in producing any given quantity of output in an efficient manner
The maximum profit level of output
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
A demand curve which is horizontal and parallel to x-axis represents:
Infinitely elastic demand
Infinitely inelastic demand
Relatively elastic demand
Relatively inelastic demand
Change in quantity demanded (expansion and contraction of demand) is:
Due to change in price while other factors remain constant
Due to change in factors other than price
Both a and b
None of the above
Under Bandwagon effects, people use those goods which are used by their:
Friends
Relatives
Family
All of them
According to Marshallian approach, utility:
Can be added
Can be subtracted
Can be multiplied
Can be divided