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
Correct Answer :
D. Equating marginal cost and marginal revenue
Related Questions
In the case of a giffen good, the income effect:
Is equal to the substitution effect
More than offsets the substitution effect
Reinforces the substitution effect
Only partially offsets the substitution effect
According to Cobb-Douglas, in production function the marginal product of labor is:
When at a given price, the quantity supplied of a commodity is more than the quantity demanded, there will be:
An upward pressure on price
A downward pressure on price
Price will remain unaffected
All of the above
A profit-maximizing monopolist in two separate markets will:
Charge the same price in both markets
Always charge a higher price in the market where he sells more
Always charge a higher price in the market where he sells less
Adjust his sales in the two markets so that his marginal revenue in each market just equals his aggregate marginal cost
When the consumer is in equilibrium not only his income is fully spent, but the ratio of marginal utility and price is:
Increased
Equalized
Prominent
Zero
Indifference curves reflect:
Preferences
Income
Prices
Consumption
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
Human wants are:
Thousands
Few
Innumerable
Hundreds
Social costs equal private costs when:
Marginal cost is zero
Total cost is zero
External costs are zero
Average costs are zero
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
In the case of an inferior commodity, the income-elasticity of demand is:
Positive
Unitary
Negative
Infinity
In the case of two factor inputs which are neither perfectly complementary nor perfect substitutes, the iso-product curve will be:
A downward sloping straight line
A downward sloping curve
An upward rising curve
Right angled iso-quants
According to Robbins, economics is a:
Science of wealth
Science of national welfare
Science of optimality
Science of scarcity
If a straight line supply curve passes through the point of origin O, the elasticity of supply is:
Zero
Infinity
Unity
More than unity
The Hicksian indirect utility function in the form of equation is:
x =f(P)
x =a-bp
Total costs are:
TFC TVC
TFC/TVC
TVC/TFC
TFC +TVC
Who first used the term Quasi-Rent?
David Ricardo
Alfred Marshal
J.S.Mill
Karl Marx
If there are many producers, each of whom has an individual production possibility curve, then the lowest marginal cost producer of good X is the producer:
Who must sacrifice fewer units of every other goods than any other producer
Who can produce more X per hour than any other producer
Who must sacrifice more units of every other goods than any other producer
None of the above
An optimum level of a firms output is:
Where marginal cost is minimum
Where average cost is minimum
Where both the marginal and the average cost curves are at their respective minimum
Where the firm earns the maximum profits
In short run, a firm can change its:
Total production
Fixed production
Variable production
None of the above
If the supply curve is not a straight line but curvilinear, the elasticity on all points of the supply curve is:
Equal
Different
Zero
Infinity
Which of the following is not a U shaped curve:
Marginal cost curve
Average variable cost curve
Fixed cost curve
Average cost curve
In monopolistic competition, the firms follow:
Exotic behavior
Sympathetic behavior
Myopia behavior
Regular behavior
The elasticity of demand is equal to slope of demand function divided by:
Average demand function
Qualified demand function
Constructive demand function
Relative demand function
The point where the supply and demand curves intersect on a graph determines:
Market price
Equilibrium price
Long-term price
Short-term price
The economic problem of determining the combination of inputs yielding lowest cost for producing a given output:
Is only a choice among the technologically efficient combination
Depends on the relative price of inputs
Depends on the price of the product
Depends on the profits made
The marginal revenues are derivatives of:
TR function
AR function
MR function
AP function
Total utility:
Diminishes with increased consumption
Reflects the overall level of satisfaction of the consumer
Is directly related to the price the consumer is willing to pay for a good or service
Is independent of price changes
The nominal income of a consumer is income in terms of:
Goods
Goods and services
Goods and services it can purchased
Monetary units
The average product is given as:
Q.L
Q- L
Q+ L
Q/L