The main objective of the firm is to:
Face losses
Avoid losses
Bear losses
Make economic decisions
Correct Answer :
D. Make economic decisions
Related Questions
Increase in demand occurs when:
The price falls and the demand also falls down
The price increases but demand falls down
The price increases the demand remains constant and when the price remains constant the demand goes up
The price remains constant but demand falls
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
Nash equilibrium is applicable in case of:
Cournot model
Edgeworth model
Chamberline model
Sweezy model
A monopolist is:
Price winner
Price searcher
Price taker
Price leaver
Equilibrium of a discriminating monopolist requires the fulfillment of which one of the following conditions?
It must be profitable to him to sell output in more than one market
Marginal revenue in both markets must be the same
Marginal revenue in both markets must also be equal to the marginal cost of producing the monopolists aggregate output
All the above
In case of short-run, the supply curve of an industry is the horizontal summation of:
Marginal cost curves
Average cost curves
Total cost curves
None of the above
In Prisoners Dilemma, both the prisoners are interrogated:
Separately in different cells
Collectively in different cells
Collectively in same cell
Separately in same cell
Variable costs refer to:
Capital cost plus operating costs
Capital costs alone
Capital costs plus spill-over costs
Operating costs alone
The sufficient condition of firms equilibrium requires:
none of the above
For the equilibrium of the firm and the industry in the short period in a competitive market, the condition is:
P = AC
P = MC
AC = MC
MC = TR
Because the price elasticity of demand for OPEC oil is approximately .08, in order to increase revenues OPEC should:
Lower price in order to increase revenues
Lower price in order to decrease the amount of oil sold
Rise price in order to increase the amount of oil sold
Raise price in order to increase revenues
In Nash equilibrium, a player:
Deviates from his strategy
Does not deviate from his strategy
Does not think in a good way
None of the above
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
If two goods have same marginal utility for a consumer then:
He will consume only one of them
He will consume equal quantities of them
He will be willing to pay the same price for each of them
The total utility gained from each of them is equal
When the slope of a demand curve is infinite (also known as horizontal demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
None of the above
Which is the other name that is given to the average revenue curve?
Profit curve
Demand curve
Average cost curve
Indifference curve
To calculate the Economic Profit we must deduct which of the following cost from our total revenues?
Opportunity cost
Direct cost
Rent cost
Wage cost
In Edgeworth model, if price falls below competitive price, the demand is:
More than maximum output
More than minimum output
Less than maximum output
Less than minimum output
If production increases under increasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
Money spent by a firm on the purchase of capital equipment is:
Fixed cost
Variable cost
Both fixed and variable costs
None of the above
In cournot model, firms sell:
Superior goods
Inferior goods
Identical goods
Differential goods
Which of the following would be least likely to cause a consumer to eat less beef?
An increase in the price of beef
An increase in the price of lamb
A reduction in the consumers income
A reduction in the price of lamb
If the demand for good is more elastic and government levied a tax per unit of output, the price per unit for the firm would:
Rise by the amount of the tax
Rise by more than the amount of the tax
Rise by less than the amount of the tax
Remain the same
A demand curve which is horizontal and parallel to x-axis represents:
Infinitely elastic demand
Infinitely inelastic demand
Relatively elastic demand
Relatively inelastic demand
The price under perfect competition is settled by:
Producers
Sellers
Buyers
Sellers and buyers
In sweezy model (kinked demand curve model), the overall increase in costs of production:
Do not effect equilibrium
Affect equilibrium
Both a and b
None of the above
Of the following, which one is a characteristic of monopolistic competition?
Standardized product
Differentiate product
Two firms
No entry
If we measure the elasticity of demand with the help of the average and marginal revenue, the formula is:
Ed = AR/ (AR- MR)
Ed = MR/ (AR-MR)
Ed = AR/(MR-AR)
Ed = AR/ MR
The market demand for any commodity is the:
Average requirement for it in any given place
Amount of it wanted at any given price
Amount that people would like to buy during a period at different prices
Quantity needed to maintain a given standard of living
Price effect occurs on the higher IC in case of:
Slutsky approach
Hicksian approach
Marshallian approach
None of the above