Marginal cost is always:
Less than the average cost
More than the average cost
Equal to the average cost at minimum point
Never equal to the average cost
Correct Answer :
C. Equal to the average cost at minimum point
Related Questions
Elasticity (E) expressed by the term, 1>E>0, is:
Perfectly elastic
Relatively elastic
Unitary elastic
Relatively inelastic
Excess capacity is concerned with the:
V-shaped traditional cost curves
S-shaped traditional cost curves
Modern cost curves
U-shaped traditional cost curves
Who finalized the model of imperfect competition?
Ricardo
Marshal
Chamberlin
Mrs. Robinson
Two policy variables, product and selling activities in the theory of firm was introduced by:
Chamberline
Sraffa
Carl marx
Robinson
In the immediate run:
Supply curves are inelastic
Supply curves are perfectly elastic
Demand curves are elastic
Supply curves are elastic
Variable costs refer to:
Capital cost plus operating costs
Capital costs alone
Capital costs plus spill-over costs
Operating costs alone
Perfect competition assumes:
All buyers and sellers have perfect knowledge of the market
Freedom of entry of firms into the industry
Homogeneous product
All of the above
The difference between average cost and average revenue is:
Total profit
Average profit
Net profit
Marginal profit
The production function can convey to a firm:
The cost of producing any given output
The various combinations of input that could be employed in production of any given quantity of output
The various combinations of input that should be used in producing any given quantity of output in an efficient manner
The maximum profit level of output
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:
In the long-run competitive equilibrium, the theory predicts that:
TC = TR and MC = MR
Firms operate at a minimum average total cost
There is no incentive for entry or exit of firms
All these conditions exist
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
In cournot model firms:
Cannot make price adjustments
Can make price adjustments
Can adjust number of customers
None of the above
The production possibility curve (PPC) is concerned with:
Resources of the economy
Interests of the economy
Limitations of the economy
Qualities of the economy
The general form of Cobb-Douglas production function is:
There is no difference between fixed and variable factors in the:
Long run
Short run
Average run
None of the above
Demand is elastic when the coefficient of elasticity is:
greater than zero
less than one
greater than one
less than one
A firm in a position of equilibrium is supposed to be maximizing:
Output
Sales
Profits
None of the above
The number of firms in monopolistic competition normally range between:
14 to 28
14 to 80
14 to 38
14 to 60
Law of variable proportions is based on the assumption of:
Short period of time
Long period of time
Timeless production relationship
All of the above
The relationship between MC and MP shown by the marginal cost concept is:
Inverse
Direct
Negative
Positive
When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
None of the above
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
The water diamond paradox was firstly resolved with the help of:
Labor theory of value
Individual theory of value
Producer theory of value
Consumer theory of value
Theory of revealed preference is based on:
Weak orderings
Neutral orderings
Partial orderings
Strong orderings
In the perfect competition, there is a process of:
Restricted entry and exit of the firms
Semi free exit but absolute free entry
Free entry but restricted exit of the firms
Free entry and free exit of the firms
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
Price discrimination is undertaken with the aim of:
Increasing sales and maximizing profits
Reducing sales and raising prices
Minimizing cost and maximizing revenue
Serving the markets without earning profits
Under conditions of perfect competition, price in the long-run is equal to:
Minimum of average variable cost
Minimum of marginal cost
Minimum of average fixed cost
Minimum of average cost
Marginal cost is always:
Less than the average cost
More than the average cost
Equal to the average cost at minimum point
Never equal to the average cost