Price-taker firms:
Advertise to increase the demand for their product
Do not advertise, because most advertising is wasteful
Do not advertise because they can sell as much as they want at the current price
Who advertise will get more profits than those who do not
Correct Answer :
C. Do not advertise because they can sell as much as they want at the current price
Related Questions
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
Change in quantity demanded refers to:
Upward shift of the demand curve
Downward shift of the demand curve
Movement on the same demand curve
None of the above
If a new production technology for producing compact discs is developed and new firms are attracted to this field:
The supply curve will shift down or right
The supply curve will shift up or left
Both demand and supply curve shifts would occur
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
The situation of single buyer and single seller is called:
Monopoly
Multi-plant monopolist
Bilateral monopoly
Price discrimination
Competitors in monopolistic competition have full control over:
The price of their product
Product quality
The shape of the market demand curve
The elasticity of product substitution
The production function of homogeneous of degree one (n=1) is also called:
Linearly homogeneous
Zero homogeneous
Infinite homogeneous
None of the above
The marginal revenues are derivatives of:
TR function
AR function
MR function
AP function
Each SAC represents a particular level of:
Input
Output
Both of them
None of them
Income-elasticity of demand is expressed as:
% change in quantity demanded % change in income
% change in income % change in quantity demanded
Change in income Change in quantity demanded
None of the above
J.R.Hicks was:
Neo-classical economist
Classical economist
Keynesian economist
Post-Keynesian economist
Scarcity is:
A relative term
An economic term
A dynamic term
As a whole term
Marginal utility is only meant for:
Half utility
Full utility
Additional utility
Multiplied utility
Using total revenue and total cost, a profit maximizing firm will be equilibrium at a point:
Where the gap between the two is the smallest
Where the gap between the two is the greatest
Where the two become equal
None of the above
If a person behaves against the laws of economics then:
He should be condemned
He may lose his respect from society
He should be punished
He should not be punished or even criticised
Firms average and marginal revenues are equal under:
Monopoly
Perfect competition
Oligopoly
Monopolistic competition
Regarding economic decisions, economics of uncertainty identifies:
No risks
Risks
Safety
None of the above
Labor Saving 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
Who formulated the Post-Keynsian Theory of Distribution and Growth?
J.M.Keynes
N.Kaldor
C.P.Kindleberger
Irving Fisher
The supply curve for the short-run competitive firm is the same as:
Marginal cost curve
Average variable cost curve
That part of the marginal cost curve which equals or is greater than AVC
Average total cost curve
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
Kinked Demand Curve is consistent with which one of the following market situations?
Pure competition
Pure monopoly
Oligopoly
Monopolistic competition
Monopolistic firm can fix:
Both price and output
Either price or output
Neither price nor output
None of the above
4.The Law of Diminishing Returns according to the modern view, applies to:
Agriculture
All fields of production
Industry
Services
With the expansion of output, the short run average cost curve, beyond a point, starts rising because:
Average fixed cost increases sharply
More production yields lower per unit price
The law of variable proportions applies to short run production
Sales expenses become much larger
In case of monopoly, when total revenue is maximum:
MR is positive
MR falls
MR rises
MR is zero
Cournot equilibrium is attained where two reaction curves:
Repel each other
Represent each other
Intersect each other
None of the above
When marginal costs curve cuts average costs curve, average costs are:
Maximum
Zero
Minimum
Equal to one
In the short-run, in which one of the following situations would a competitive seller close down (shut-down)?
When he cannot produce at an economic profit
When price falls short of average variable cost at every level of output
When price falls short of average fixed cost at every level of output
When price falls short of average total cost at every level of output
An inferior good/ commodity is inferior for:
Every consumer
Most consumers
All consumers
Some consumers and not for others