In monopolistic competition, the cost curves of all firms are:
Uniform
Different
Dependent
Independent
Correct Answer :
A. Uniform
In monopolistic competition, demand and cost curves for all the products and for all the firms of the group are uniform i.e., firms face identical demand and cost curves.}
Related Questions
In case the two commodities are complements, cross elasticity will be:
Positive
Unitary
Negative
Infinite
Because the price elasticity of demand for OPEC oil is approximately .08, in order to increase revenues OPEC should:
Lower price in order to increase revenues
Lower price in order to decrease the amount of oil sold
Rise price in order to increase the amount of oil sold
Raise price in order to increase revenues
Price discrimination is possible:
Only under monopoly situation
Under any market form
Only under monopolistic competition
Only under perfect competition
For a few products such as insulin for diabetics,:
The demand curve can be upward sloping
The price elasticity of demand could be zero
The price elasticity of demand could be greater than one
None of the above
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
All of the following curves are U-Shaped except:
The AVC curve
The AFC curve
The AC curve
The MC curve
The relationship between AC and MC curves depend upon the behavior of:
AP curves
MP curves
Both of them
None of them
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
An inferior commodity is one whose quantity demand decreases when income of the consumer:
Decreases
Increases
Remains constant
Zero
According to law of Equi-Marginal Utility when price of commodity falls then we bought:
More units
Less units
Same units
Zero units
The fundamental choices that a society must make about the use of its resources include:
How much to produce
How to produce
How to distribute
All of the above
Moving along the indifference curve leaves the consumer:
Better off
Worse off
In equilibrium
Neither better off nor Worse off
Equilibrium of a firm represents maximization of profits as well as:
Maximization of losses
Minimization of losses
Minimization of profits
None of the above
Under monopolistic competition, the firms compete alongwith:
Supreme powers
Discretionary powers
Low powers
None of the above
If Cobb-Douglas production function is homogeneous of degree less than one (n<1), then it shows:
Constant returns to scale
Increasing returns to scale
Decreasing returns to scale
None of the above
Stable cobweb model is a:
Simple model
Dynamic model
Both of them
None of them
The proportional demand curve in monopolistic competition (also in kinked demand curve model), is like industry demand curve in:
Monopolistic competition
Imperfect competition
Monopoly
Perfect competition
The general form of Cobb-Douglas production function is:
If two households have identical preferences but different incomes then:
They must consume the same amounts of all goods
The wealthier one will have lower marginal utility for most goods
The wealthier one will have higher marginal utility for most goods
They will enjoy the same level of utility
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
The short-run supply curve of the perfectly competitive firm is given by:
The rising portion of its MR over and above the break-even (shut-down) point
The rising portion of its MC over and above the break-even (shut-down) point
The rising portion of its MC over and above the AC curve
The rising portion of its MC curve
Average Revenue means:
Per unit revenue received from all the units sold by the producer
Revenue of the units having average size
Total number of units× Revenue per unit
Total revenue × Number of units sold
Income -elasticity of demand will be zero when a given change in income brings about:
A less than proportionate change in quantity demanded
A more than proportionate change in quantity demanded
The same proportionate change in quantity demanded
No change in quantity demanded
The basic and essential economic problems in a community are related to choice and:
Freedom
Scarcity
Social class
Politics
Which of the following is assumed to be constant when drawing a demand curve?
Consumer tastes
Prices of inputs
Technology
Number of sellers
In short run, a firm can change its:
Total production
Fixed production
Variable production
None of the above
In price leadership, like leader, the follower firm may:
also maximize its profits
not maximize its profits
maximize its costs
none of the above
Production function shows:
Technical relationship between inputs and output
Profitability production
Relation between MR and MC
Relation between AR and AC
Each firm in cournot model starts selling:
1/2 of the total market demand
1/4 of the total market demand
1/3 of the total market demand
None of the above
When total product (TP) is maximum:
MP is negative
MP is infinite
MP is zero
None of the above