In monopolistic competition, the aim of the firm is to:
Maximize output
Minimize output
Minimize cost
Maximize profit
Correct Answer :
D. Maximize profit
Related Questions
Identify the work of T.W.Schultz:
Transforming Traditional Agriculture
Productivity and Technical Change
Jobs, Poverty and the Green Revolution
Causes of Poverty
In the short-run, the competitive firm can maximize its profits (or minimize its losses) by:
Equating price and marginal revenue
Equating price and average total cost
Increasing marginal cost and lowering fixed costs
Equating marginal cost and marginal revenue
Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:
Negative
Positive
Infinite
Negative infinite
Indifference curves reflect:
Preferences
Income
Prices
Consumption
A producer attains the least cost combination when the relation between Marginal Rate of Technical Substitution (MRTS) and price (P) of the factors x and y is:
The behavior of MC curve is determined by the behavior of the:
AC curve
SC curve
TC curve
None of the above
In case of monopoly, the price charged against the additional unit is:
Not different
Same
Not same
Zero
If in the long run, output increases in the same proportion as increase in all the input in the given proportion, this is known as:
Increasing returns to scale
Decreasing returns to scale
Constant returns to scale
Variable returns to scale
If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:
Perfectly elastic
Elastic
Unitary elastic
Inelastic
In measuring price-elasticity:
Price is a dependent variable and quantity is an independent variable
Price is an independent variable and quantity is a dependent variable
Price and quantity both are independent variables
Price and quantity both are dependent variables
The game theory is concerned with:
Perfect competition
Imperfect competition
Price discrimination
Duopoly and oligopoly
Under perfect competition, the average revenue, marginal revenue and price are shown:
By a same single curve
By three different curves
By downward sloping curve
None of the above
The horizontal demand curve for a commodity shows that its demand is:
Highly elastic
Perfectly inelastic
Perfectly elastic
Zero elastic
Which form of market structure is characterized by interdependence in decision-making as between the different competing firms?
Oligopoly
Perfect competition
Imperfect competition
None of the above
Dumping is international discriminating:
Monopoly
Oligopoly
Duopoly
None of the above
When elasticity of demand is one (e=1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
The firm in cournot model:
face costs
face taxes
donot face taxes
donot face costs
According to translog production function, elasticity of substitution is:
Greater than one
Less than one
Zero
Equal to one
If a consumer buys a product that costs Rs.3 and provides an additional 18 units of satisfaction, then for this purchase:
Total utility will increase by 6 units
The marginal utility per rupee is 6
The consumer will buy more because marginal utility is positive
The consumer obtained an extra54 units
Contraction of demand means:
Less quantity demanded at the same price
Less quantity demanded at a higher price
Less quantity demanded at a lower price
None of the above
The law of variable proportions comes into being when:
All factors are variable
There is a fixed factor and variable factor
All factors are non-variable
None of the above
If X and Y are close substitutes, a fall in price of X will lead to:
Increase in demand for Y
Decrease in demand for Y
Increase in demand for both X and Y
Increase in demand for Y
Contracts made by firms in cooperative games are:
Biased
Binding
Not binding
Conditional
The critics of Sweezy model say that kink generates:
Frustration
Poverty
Uncertainty
Integrity
Average cost curve contains in it:
Normal profits
No normal profits
Sometimes normal profits and sometimes no normal profits
Super normal profits
A fall in demand for the product under monopolistic competition will likely result in:
A fall in price
A decrease in the number of firms in the long-run
A decrease in the output of each firm
All of the above
Price-taker firms:
Advertise to increase the demand for their product
Do not advertise, because most advertising is wasteful
Do not advertise because they can sell as much as they want at the current price
Who advertise will get more profits than those who do not
In economist the term invisible hand is refers to:
Hand of God
Market self regulating system
Hands of invisible people
Regulations of government
Price mechanism has also given the name:
Labor theory
Production theory
Laisseze-faire
None of the above
The demand curve of ostentation goods (Veblen goods) will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above