The price under perfect competition is settled by:
Producers
Sellers
Buyers
Sellers and buyers
Correct Answer :
D. Sellers and buyers
As we know that the equilibrium price in perfect competition is settled by the forces of supply and demand. Supply of product is from the side of sellers and demand of product is from the side of buyers. So, price is settled by both buyers and sellers.}
Related Questions
The effects according to which people use those goods which are concerned with distinctive standard of living are:
Bandwagon effects
Snob effects
Veblen effects
Steven effects
Each firm in cournot model assumes that its competitor will:
change its output
not change its output
change its price
not change its price
The Hicksian indirect utility function in the form of equation is:
x =f(P)
x =a-bp
Airlines that try to lower fares in order to increase revenues believe that demand for airline services is:
Price elastic
Price inelastic
Income elastic
Income inelastic
The game theory is concerned with:
Perfect competition
Imperfect competition
Price discrimination
Duopoly and oligopoly
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
Abstinence or Waiting theory of Interest was presented by:
Lord Keynes
J.S.Mill
Alfred Marshal
Prof.Senior
External economies are witnessed in:
A rising supply curve
A rising demand curve
A falling supply curve
A falling demand curve
Excess capacity is concerned with the:
V-shaped traditional cost curves
S-shaped traditional cost curves
Modern cost curves
U-shaped traditional cost curves
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
Slope of a demand curve is:
Not relevant to elasticity
The only factor determining elasticity
Only one of the factors influencing elasticity
None of the above
Each short run average cost curve:
Has to touch the long run cost curve
Has to cross the long run cost curve
Has to lie above all points on the long run cost curve
Coincides with the long run cost curve at some point
If price exceeds AVC but in smaller than AC at the best level of output, the firm is:
Making a profit
Incurring a loss but should continue to produce in the short-run
Incurring a loss and should stop producing immediately
Making a normal profit
The demand curve of a firm in monopolistic competition is:
Negatively sloped
Vertical
Horizontal
Positively sloped
If both demand and supply were to increase then:
Quantity exchanged would fall and price would rise
Quantity exchanged and price would both fall
Quantity exchanged would rise and price might rise or fall
Quantity exchanged and price would both rise
If the commodity is inferior then:
Income effect is positive but substitution effect is negative
Income effect is negative but substitution effect is positive
Both income effect and substitution effect are negative
Both income effect and substitution effect are positive
Short run cost curves are influenced by:
Principle of returns to scale
Law of variable proportions
External and internal economies and diseconomies
None of the above
In terms of price, the indirect utility function may be:
Concave
Quasi-convex
Straight line
Convex
According to Marginalists, the price of any commodity is determined by:
Marginal usefulness
Marginal cost
Both of them
None of them
According to critics, the assumption of costless production is:
true
not true
reliable
deniable
According to current thinking, the law of diminishing returns applies to:
All fields of production
Agriculture
Mining
Manufacturing
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
Who is the author of the famous work Asian Drama: An Enquiry intro the Causes of Poverty of Nations?
Irving Fisher
J.B.Clark
J.M.Keynes
Gunnar Myrdal
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
Which form of market structure is characterized by interdependence in decision-making as between the different competing firms?
Oligopoly
Perfect competition
Imperfect competition
None of the above
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 the range of excess capacity, the average costs are:
Maximum
Minimum
Equal to one
Equal to zero
The model which gives us information about price and output changes in different periods is:
Stable cobweb model
Perpetual oscillation
Both(a) and(b)
None of them
The slutsky demand curve includes:
Income effect
Price effect
Substitution effect
None of the above
In perfectly competitive markets, the profit maximization rule can be represented by:
MR=ATC
P=ATC
P=MC
P=AC