The firm producing at the minimum point of the AC curve is said to be:
Operating under diminishing cost
Making optimum use of plant capacity
Operating at excess capacity
Operating under increasing costs
Correct Answer :
B. Making optimum use of plant capacity
Related Questions
Price elasticity of demand is best defines as:
Change in the tastes of consumers at different prices
The rate of response of demand to a change in supply
The change in costs when output is increased by one unit
The responsiveness of demand to a change in price
The firms in non-cooperative games:
Enforce contracts
Make contracts
Make negotiations
Do not make negotiations
The production possibility curve (PPC) is concerned with:
Resources of the economy
Interests of the economy
Limitations of the economy
Qualities of the economy
An inferior good/ commodity is inferior for:
Every consumer
Most consumers
All consumers
Some consumers and not for others
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
In real life, brand loyalty is a barrier to:
Enter the new firms
Exit the new firms
Both a and b
None of the above
In case of monopoly, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
Pure monopoly exists:
When there is a single producer
When there is a single producer without any close substitute
When there is a single producer with close substitutes
When a few producers control the industry
Increasing returns imply:
Constant average cost
Diminishing cost per unit of output
Optimum use of capital and factor
External economies
If the price of a product falls then quantity demanded tends to increase ceteris paribus because:
The MU/P ratio has decreased
Of the income and substitution effects
Consumers tend to feel poorer when prices fall
When price falls the demand curve shifts right
The indifference curve technique:
Helps in separating the income effect and the substitution effect
Does not help in separating the two effects
Mixed up the two effects
None of the above
A monopoly producer has:
Control over production but not over price
Control neither on production nor on price
Control over consumers
Control over production as well as over price
The cost curves of the firm shift due to changes in:
Input prices
Technological innovations
Both of them
None of them
The short-run supply curve of the perfectly competitive firm is given by:
The rising portion of its MR over and above the break-even (shut-down) point
The rising portion of its MC over and above the break-even (shut-down) point
The rising portion of its MC over and above the AC curve
The rising portion of its MC curve
A normal profit is:
A zero economic profit
Revenues less explicit cost
About 10% for most industries
A zero accounting profit
Monopoly means:
Where there is no retail trade and every thing is sold on wholesale basis
Where trading of a particular commodity is controlled exclusively by one firm
Where many people sell only one commodity
A form of business organization in which only single proprietorship exists
The costs faced by the firm against fixed factors are:
Total costs
Fixed costs
Variable costs
Marginal costs
In 1776, a famous book An enquiry into the nature and causes of the wealth of nation was written by:
J.S.Mill
Adam Smith
Robert Malthus
David Ricardo
If under perfect competition, in the short period, price does not cover the average cost completely, the firm will even then stay in the market as long as:
The average fixed cost is covered
The average variable cost is covered
Some profit is earned
The entrepreneurs enjoy producing
According to law of Equi-Marginal Utility when price of commodity falls then we bought:
More units
Less units
Same units
Zero units
Firms average and marginal revenues are equal under:
Monopoly
Perfect competition
Oligopoly
Monopolistic competition
From the resource allocation view point, perfect competition is preferable because:
The firms operate at excess capacity levels
There is a whole variety of output produced
There is no restriction on entry and exit of firms
There is no idle capacity
If in the long run all factor inputs are increased three times and the resulting output is four times as before, it is a case of:
Decreasing returns to scale
Variable returns to scale
Constant returns to scale
Increasing returns to scale
Cross-elasticity of demand or cross-price elasticity between two complements will be:
Negative
Positive
Infinite
Zero
The long-run AC curve is constructed from:
The minimum points on all short-run AC curves
The lowest points on the short-run MC curve
The minimum points on the short run AVC curves
It has nothing to do with the short-run cost curves
The main contribution of David Ricardo is in the field of:
Wages of labor
Factor pricing
Theory of rent
Determination of the rate of interest
Whish of the following represents the average revenue curve of a firm?
The curve representing the cost per unit of output
The demand curve of consumers for the firms product
Total receipts realized by the firm
All of the above
According to the principle of substitution?
Many goods have no effective substitutes
Nearly all goods have substitutes
The prices of substitute goods must be the same
Buyers will stop buying a good if its price rises
The alternative of profit maximization theory is:
Cost maximization
Product maximization
Revenue maximization
None of the above
Increasing return to scales can be explained in terms of:
Optimal factor proportions
Fixed scale of plant
External and internal economies
Labor productivity