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4

Under perfect competition, the average revenue, marginal revenue and price are shown:

A. By a same single curve

B. By three different curves

C. By downward sloping curve

D. None of the above

Correct Answer :

A. By a same single curve


Under perfect competition the demand curve ( AR curve) which an individual seller has to face is perfectly elastic and parallel to xaxis .The individual producer is unable to effect the market price and so he is a price taker. He supplies the unlimited quantity of product at prevailing price. Hence MR equals the price of the product and AR is also equal to MR. So MR = AR = P. These three curves are coincide and always shown by a single curve which is perfectly elastic and parallel to the x-axis.}

Related Questions

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4

In dominant strategies I am doing the best, I can no matter:

A. What you do

B. What you are doing

C. What you not do

D. None of them

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4

In the case of complements, the cross demand curve slopes:

A. Downwards to the right

B. Upwards to the right

C. Backwards to the top

D. Inwards at the bottom

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4

Who is the author of Choice of Technique?

A. K.N.Raj

B. Amartiya Sen

C. A.C.Pigou

D. Alfred Marshal

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4

Capital and Development Planning is the work of:

A. S.Chakravarty

B. J.S.Mill

C. A.C.Pigou

D. F.W.Taussig

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4

In sweezy model (kinked demand curve model), the role of MC curve:

A. Can be ignored

B. Cannot be ignored

C. Partially be ignored

D. None of the above

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4

Change in demand (rise and fall of demand) is:

A. Due to change in price while other factors remain constant

B. Due to change in factors other than price

C. Both a and b

D. None of the above

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4

In general, most of the production functions measure:

A. The productivity of factors of production

B. The relation between the factors of production

C. The economies of scale

D. The relations between change in physical inputs and physical output

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4

Which is not an essential feature of a socialist economy?

A. Social ownership of the means of production

B. Freedom of enterprise

C. Use of centralized planning

D. Government decisions

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4

A vertical supply curve parallel to the price axis implies that the elasticity of supply is:

A. Zero

B. Infinite

C. Equal to one

D. Greater than zero but less than infinite

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4

Of the following, which one corresponds to fixed cost?

A. Payments for raw materials

B. Labor cost

C. Transportation charges

D. Insurance premium on property

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4

According to Leontief technology, there:

A. Is only one technique of production

B. Are few techniques of production

C. Are many techniques of production

D. Are two techniques of production

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4

If the commodities X and Y are perfect substitutes then:

A.

B.

C. >

D. None of the above

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4

Who is the founder of classical school of thought?

A. David Ricardo

B. Adam Smith

C. T.R.Malthus

D. J.S.Mill

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4

Which of the following models are associated with non-collusive oligopoly?

A. Bertrand model

B. Chamberlin model

C. Kinked demand model (Sweezy Model)

D. All of the above

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4

Economic laws are:

A. Conditional

B. Moral by nature

C. Predicted

D. Like laws of sports

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4

Total costs are:

A. TFC TVC

B. TFC/TVC

C. TVC/TFC

D. TFC +TVC

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4

In income effect, we:

A. Move to another indifference curve

B. Move along given indifference curve

C. Move to lower indifference curve

D. Move to upper indifference curve

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4

Indifference curves are downward sloping and are drawn bowed toward the origin (convex to the origin) implying:

A. Consumers prefer to have less satisfaction than more of both commodities

B. As more and more of one commodity is obtained, less and less of the other must be given up to keep satisfaction constant

C. The total satisfaction obtained along an indifference curve decreases at an increasing rate

D. None of the above

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4

The Input-Output Analysis was originated by:

A. W.W. Leontief

B. E.D.Domar

C. R.G.D.Allen

D. J.M.Keynes

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4

An indifference curve normally slopes downward from:

A. Left to right

B. Right to left

C. Both of them

D. None of them

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4

A significant property of the Cobb-Douglas production function is that the elasticity of substitution between inputs is:

A. Greater than one

B. Less than one

C. Zero

D. Equal to one

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4

A monopoly producer usually earns:

A. Abnormal profits

B. Only normal profits

C. Neither profits nor losses

D. Profits and losses which are uncertain

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4

The monopolist firm is price setter. The price setter firm is one which:

A. Can influence the market price

B. Cannot influence the market price

C. Can sell at zero price

D. None of the above

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4

In Edgeworth model, prices oscillate between:

A. Firms and industry price

B. Monopoly and duopoly price

C. Competitive and monopoly price

D. None of the above

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4

According to M.Kalecki, the true measure of the degree of monopoly power is the:

A. Ratio between price and marginal cost

B. Extent of monopolistic profit enjoyed by him

C. Cross-elasticity of demand for the product of the monopolist

D. Price charged by the monopolist minus marginal cost of production

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4

In dominant price leadership model, the small firms are like:

A. monopolistic firms

B. monopoly

C. competitive firms

D. none of the above

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4

Consumer surplus is the difference between

A. Price demanded and price paid

B. Price quoted and price actually paid

C. Price that a consumer is willing to pay and the price actually paid

D. None of the above

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4

The economic problem of determining the combination of inputs yielding lowest cost for producing a given output:

A. Is only a choice among the technologically efficient combination

B. Depends on the relative price of inputs

C. Depends on the price of the product

D. Depends on the profits made

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4

Elasticity of demand is equal to unity while marginal revenue is:

A. Positive

B. Zero

C. Negative

D. Indeterminate

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4

If the factors have to be employed in a fixed ratio, then the elasticity of substitution under Leontief technology is:

A. One

B. Zero

C. Two

D. Five