In short run, a firm would remain in business as long as which one of the following of cost is covered?
Total costs
Fixed costs
Variable costs
Constant costs
Correct Answer :
C. Variable costs
Related Questions
The concept of industry in monopolistic competition has been replaced by:
Firm
Product group
Producers
Shopkeepers
The cost of production is faced by a:
Producer
Consumer
Seller
Firm
When the demand curve is rectangular hyperbola, it represents:
Unitary elastic demand
Perfectly elastic demand
Perfectly inelastic demand
Relatively elastic demand
The Law of Proportionality is another name of:
The law of diminishing marginal utility
The law of demand
The Law of Diminishing Returns
The law of supply
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
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
If the demand curve is inelastic then:
It may be nearly vertical
Quantity demanded is very sensitive to income
Demand is hardly affected by income
Close substitutes for the good are abundant
The effects according to which people use those goods which are concerned with distinctive standard of living are:
Bandwagon effects
Snob effects
Veblen effects
Steven effects
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
Which industries spend a relatively large share of their revenue on research and development in order to keep up with their competitors?
Grocery stores
High-Tech industries
Automobiles
Construction
If the price of a product falls which of the following would occur?
Indifference curves shift down
Budget line shifts down
Indifference curve shift up
Budget line pivots
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 short run cost curve is U shaped because of:
The operation of increasing cost
The existence of fixed cost
The existence of variable cost
All of the above
In monopolistic competition, the firm compete on the basis of:
Price
Entry
Both a and b
None of the above
An exceptional demand curve is:
Downward sloping
Upward sloping
Horizontal straight line
Vertical straight line
If demand increased and supply decreased then:
Quantity exchanged might rise or fall and price would rise
Quantity exchanged would rise and price would fall
Quantity exchanged would rise and price might rise or fall
Both quantities exchanged and price would rise
The falling part of total Utility (TU) curve shows:
Increasing marginal utility
Decreasing marginal utility
Zero marginal utility
Negative marginal utility
Profits of a firm will be calculated taking into account the units produced and the difference between:
Real cost and money cost
Variable cost and fixed cost
Average cost and average revenue
Marginal cost and average cost
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
A firm enjoys maximum control over the price of its product under:
Monopoly
Perfect competition
Oligopoly
Imperfect competition
Neutral Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
If the commodity is normal then the Income Effect (I.E) and the Substitution Effect (S.E):
Both move together and reinforce each other
One moves and the other remains constant
Move in the opposite direction and neutralize each other
Both remain constant
Which cost increases continuously with the increase in production?
Average cost
Marginal cost
Fixed cost
Variable cost
The horizontal demand curve for a commodity shows that its demand is:
Highly elastic
Perfectly inelastic
Perfectly elastic
Zero elastic
Conditions of perfect competition ensure:
That each firm can influence the price
No single firm can influence the price
Any single firm can influence the supply condition in the market
Any single firm can influence both supply and price in the market
The costs faced by the firm against variable factors are:
Variable costs
Fixed costs
Average costs
Marginal costs
The main objective of the firm is to:
Face losses
Avoid losses
Bear losses
Make economic decisions
The difference between the average total cost and average variable cost as output increases will:
Increases
Remains the same
Diminishes
Zero
Most of the supply curves with which the average consumer deals are:
Vertical
Horizontal
Controlled by the largest producers
Unaffected by inflation
Entry of new firms into a competitive market will shift the supply curve of the:
Firm to the left
Industry to the right
Firm to the right
Industry to the left