To attain maximum profits during short-run a firm should produce the output that will:
Yield maximum total revenue
Minimize marginal cost
Maximize marginal cost
Equate marginal revenue with marginal cost
Correct Answer :
D. Equate marginal revenue with marginal cost
Related Questions
In case of monopoly, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
At a point above the middle of a straight line demand curve, elasticity of demand is:
Less than one
Equal to one
More than one
Equal to infinite
A market-clearing price:
Is a disequilibrium price
Is an equilibrium price
Means a shortage exists as a market is cleared
Must be set by the government
Contraction of demand means:
Less quantity demanded at the same price
Less quantity demanded at a higher price
Less quantity demanded at a lower price
None of the above
If two goods are complements then indifference curve (IC) will be:
Straight line
Convex to origin
Concave to origin
Lshaped
In the modern theory of costs, the level of production which the firm considers feasible is known as:
Input factor
Heavy factor
Output factor
Load factor
The cobweb model will convergent when the slope of:
Demand curve is more than supply curve
Supply curve is more than demand curve
Supply curve is equal to demand curve
None of the above
Price is measured in:
Physical units
Monetary units
Constant units
Current units
By reducing the prices of its products below those of its competitors, a perfectly competitive seller:
Reduces its revenues
Increases its revenues
Can sell nothing
None of the above
In case of monopoly, both AR and MR fall, but MR falls:
Double to that of AR
1/2 to that of AR
2/3 to that of AR
Four times to that of AR
An economic theory is :
An axiom
A proposition
A hypothesis
A tested hypothesis
The game theory concentrates on:
Gaming
Strategic decisions
Both a and b
None of the above
Labor theory was firstly rejected by:
Adam Smith
Karl Marx
Ricardo
Pigou
The largest possible loss that a firm will make in the short run is:
Zero
Its total fixed cost
Its total variable cost
Equal to one
The non-price competition cartel is a:
stable cartel
unstable cartel
prominent cartel
special cartel
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
Marshallian approach is also known as:
Cardinal approach
Ordinal approach
Consumer approach
Production approach
Who first used the term Quasi-Rent?
David Ricardo
Alfred Marshal
J.S.Mill
Karl Marx
In perfect competition, the slope of the total revenue curve of a firm is equal to the:
Market price
AVC
TFC
AFC
Price mechanism has also given the name:
Labor theory
Production theory
Laisseze-faire
None of the above
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 difference between accounting profits and economic profits is:
Implicit costs
Explicit costs
Fixed costs
Variable costs
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
The firm is at equilibrium where:
Output is maximum
Profit is maximum
Revenues are maximum
Profit is minimum
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
Income effect operates through an increase
In nominal income
In money income
In wages
In real income because of the fall of price of a commodity
The cost that a firm incurs in purchasing or hiring any factor of production is referred to as:
Explicit cost
Implicit cost
Variable cost
Fixed cost
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
The demand of the necessities is:
More elastic
Less elastic
Unit elastic
Zero elastic
In income effect, we:
Move to another indifference curve
Move along given indifference curve
Move to lower indifference curve
Move to upper indifference curve