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In the short-run, the competitive firm can maximize its profits (or minimize its losses) by:

A. Equating price and marginal revenue

B. Equating price and average total cost

C. Increasing marginal cost and lowering fixed costs

D. Equating marginal cost and marginal revenue

Correct Answer : D.


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  1. If demand increased and supply decreased then:
  2. Which of the following is the work of A.C.Pigou?
  3. Necessary condition for consumer equilibrium is:
  4. By increasing the price of its products above those of its competitors, a perfectly competitive seller:
  5. In the long-run competitive equilibrium:
  6. The MC curve cuts the AVC and ATC curves:
  7. Total fixed costs are:
  8. Law of variable proportions is based on the assumption of:
  9. A vertical supply curve parallel to the price axis implies that the elasticity of supply is:
  10. Production function relates:
  11. In Edgeworth model, if price falls below competitive price, the demand is:
  12. At a point where a straight line demand curve meets the price axis (Y-axis), the elasticity of demand…
  13. In a perfectly competitive market, suppliers must know:
  14. Returns to scale is a:
  15. Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:
  16. If a good is an inferior good then an increase in incomes of the consumers will:
  17. Rational economic behavior on the part of the consumer means that he will:
  18. Cross-elasticity of demand or cross-price elasticity between two complements will be:
  19. In case of budget line, we get pairs of two goods where consumers income is:
  20. Under the perfect competition, the transportation cost:
  21. Formulation of an economic theory involves:
  22. MC curve is:
  23. The short-run supply curve of the perfectly competitive firm is given by:
  24. In Bertrand model, the entry of new firms is:
  25. Microeconomics is also known as:
  26. If a firm produces zero output in the short period then which statement is true?
  27. The game theory was basically presented by:
  28. In perfectly competitive markets, the profit maximization rule can be represented by:
  29. Equilibrium of a discriminating monopolist requires the fulfillment of which one of the following conditions?
  30. If two goods have same marginal utility for a consumer then: