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The largest possible loss that a firm will make in the short run is:

A. Zero

B. Its total fixed cost

C. Its total variable cost

D. Equal to one

Correct Answer : B.


{At the shut-down point, the total maximum loss of the firm is equal to its total fixed cost (TFC). At this point firms revenues are equal to total variable cost (TR=TVC) and price is equal to average variable cost (P=AVC).}

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  1. MRSxy measures:
  2. Total fixed costs are:
  3. A fall in demand for the product under monopolistic competition will likely result in:
  4. Total profits are maximized at the point where:
  5. In real life firms:
  6. MC = MR = AC = AR shows the long run equilibrium position of the:
  7. If the commodities X and Y are perfect complements then:
  8. Who stated explicitly for the first time the Law of Camparative Costs?
  9. The firms in non-cooperative games:
  10. In Revealed Preference Theory, Samuelson proves P.E = S.E + I.E :
  11. In monopolistic competition, the firms face:
  12. The model which gives us information about price and output changes in different periods is:
  13. If under perfect competition, in the short period, price does not cover the average cost completely,…
  14. In sweezy model (kinked demand curve model), the role of MC curve:
  15. Other things remaining the same, when a consumers income increases his equilibrium point moves to:
  16. The law of variable proportions comes into being when:
  17. The budget constraint can be written as:
  18. In monopolistic competition, the firm compete on the basis of:
  19. Discriminating monopoly implies that the monopolist charges different prices for his commodity:
  20. Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:
  21. When there is decrease in demand the demand curve:
  22. In the long run average costs curve, a firm can change:
  23. Supply of commodity is a:
  24. An indifferent curve shows:
  25. Because the price elasticity of demand for OPEC oil is approximately .08, in order to increase revenues…
  26. Price elasticity of demand is best defines as:
  27. In Recardian theory of value, the stress has been made on:
  28. Production indifference curve (isoquant) is a curve which shows:
  29. According to law of Equi-Marginal Utility when price of commodity falls then we bought:
  30. The firm is said to be in equilibrium when the difference between revenue and cost is: