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4

In monopolistic competition, if a firm lowers its price, the rival firms will:

A. Also lower their prices

B. Increase their prices

C. Show no reaction

D. None of the above

Correct Answer :

A. Also lower their prices


Related Questions

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General Equilibrium deals with the equilibrium of the:

A. Consumer

B. Producer

C. Farmer

D. All the producers and consumers

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If the marginal utility is divided by the price of the commodity then it is called:

A. Real Marginal Utility

B. Gross Marginal Utility

C. Weighted Marginal Utility

D. Money Marginal Utility

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Contraction of demand means:

A. Less quantity demanded at the same price

B. Less quantity demanded at a higher price

C. Less quantity demanded at a lower price

D. None of the above

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7.The costs which the firms have to face in order to change the price tags of their products and services are called:

A. Product costs

B. Real costs

C. Menu costs

D. Nominal costs

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Price effect occurs on the higher IC in case of:

A. Slutsky approach

B. Hicksian approach

C. Marshallian approach

D. None of the above

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The advantage of using indifference curves rather than marginal utilities is:

A. We do not need to attach util values to consumption

B. Consumers can attain higher utility

C. It takes into account how much income the household has

D. We can determine how much of one good the consumer is willing to sacrifice in order to consume one more unit of another

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Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?

A. MC =AC and P

B. MC = AC and P=MR

C. P =MC and P

D. MC=MR and P =AR= ATC

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When total product increases at a decreasing rate:

A. MP = AP

B. MP < AP

C. MP > AP =0

D. MP > AP

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The entry of new firms in cournot model is:

A. Banned

B. Free

C. Partially free

D. Allowed

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The General Theory of Employment, Interest and Money is the major work of :

A. N.Kaldor

B. Alfred Marshal

C. J.M.Keynes

D. J.S.Duesenberry

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A demand schedule is shown as:

A. A function of price alone

B. A result of change in tastes

C. A result of increase in the size of the family

D. None of the above

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In non-constant sum game (non-zero sum game), if there are two parties then:

A. Both parties make better-off

B. Both parties make worse-off

C. Both parties become Neutral

D. Both parties can become better off or worse off

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If the demand curve is inelastic then:

A. It may be nearly vertical

B. Quantity demanded is very sensitive to income

C. Demand is hardly affected by income

D. Close substitutes for the good are abundant

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When AC curve falls, MC curve falls:

A. More than AC curve

B. Less than AC curve

C. Equal to AC curve

D. None of the above

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Economic problems arise because:

A. Wants are unlimited

B. Resources are scarce

C. Scarce resources have alternative uses

D. All of the above

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The Latin term citeris paribus means:

A. Other things being equal

B. Because of this

C. Due to this

D. All the factors changes at the same rate

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An effective price ceiling usually results in:

A. Excess demand

B. Qd > Qs

C. Shortage of supply

D. All of the above

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When marginal costs curve cuts average costs curve, average costs are:

A. Maximum

B. Zero

C. Minimum

D. Equal to one

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A high value of cross-elasticity indicates that the two commodities are:

A. Very good substitutes

B. Poor substitutes

C. Good complements

D. Poor complements

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Traditionally, the study of determination of price is called:

A. Theory of price

B. Theory of value

C. Theory of labor

D. Theory of cost

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Economics is a:

A. Exact science

B. Inexact science

C. Pure science

D. All of the above

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Cross-demand curve shows:

A. The effect of a change in price of X on its demand

B. The effect of a change in price of X on the demand for Y

C. The effect of a change in price of Y on its demand

D. None of the above

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Chamberline introduces the concept of:

A. V-shaped selling cost

B. U-shaped selling cost

C. V-shaped purchasing material

D. U-shaped purchasing material

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The marginal revenue of a perfectly competitive firm is:

A. Equal to the prices of its products

B. Positively related to output

C. Negatively related to output

D. Always higher than marginal cost

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According to Marshal, the Law of Diminishing Marginal Utility:

A. Applies on both money and other commodities

B. Does not apply on money

C. Does not apply on bank money but applies on cash money

D. Applies on all the commodities except on money

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Excess capacity is not found under:

A. Monopoly

B. Monopolistic competition

C. Perfect competition

D. Oligopoly

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Efficient allocation of resources is likely to be achieved under:

A. Monopoly

B. Monopolistic competition

C. Perfect competition

D. Any market form

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The cost curves of the firm shift due to changes in:

A. Input prices

B. Technological innovations

C. Both of them

D. None of them

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The Law of Equi-Marginal Utility states:

A.

B. per income rupee

C.

D.

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If the commodity is inferior then the increase in income of the consumer results in:

A. More purchase

B. Less purchase

C. Same purchase

D. None of the above