Under perfect competition, the average revenue, marginal revenue and price are shown:
By a same single curve
By three different curves
By downward sloping curve
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
When total revenue is maximum in monopoly, elasticity of demand is:
E =1
E >1
E <1
E =0
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Economics of state
Wealth of Nations
Value and price
Theory of demand
At final equilibrium in cournot model, each firm sells:
1/2 of the total market demand
1/4 of the total market demand
1/3 of the total market demand
None of the above
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Unstable
Stable
Variable
Fluctuating
Under monopoly and imperfect competition MC is:
More than the price
Less than the price
Equal to the price
Less than or equal to the price
If the production function is homogeneous, the expansion path will be a straight line through the origin whose slope determines the optimal:
L/K ratio
K/L ratio
P/L ratio
P/K ratio
Total utility and price are:
Directly related
Unrelated
Closely related
Negatively related
The pay-off matrix shows:
Possible outcomes
Possible benefits
Possible losses
None of them
The difference between laws of return and laws of return to scale is:
In case of laws of return, one factor of production is constant and other is variable while in laws of return to scale both factors of production are variable
In case of laws of return to scale, one factor of production is constant and other is variable while in laws of return, both factors of production are variable
Both a and b
None of the above
In cournot model firms:
Cannot make price adjustments
Can make price adjustments
Can adjust number of customers
None of the above
According to critics, the assumption of costless production is:
true
not true
reliable
deniable
Technological efficiency:
Is the same as economic efficiency
Is achieved when the output produced is maximum for the given level of inputs
Means that there is only one way to produce a given quantity of output
None of the above
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TR function
AR function
MR function
AP function
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MC
MC>MR
MC=AP
MC=MR
Market demand curve is:
Vertical summation of individual demand curves
Upward summation of individual demand curves
Downward summation of individual demand curves
Horizontal summation of individual demand curves
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We do not need to attach util values to consumption
Consumers can attain higher utility
It takes into account how much income the household has
We can determine how much of one good the consumer is willing to sacrifice in order to consume one more unit of another
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Output cost
Output ratio
Input prices
Input ratio
The falling part of total Utility (TU) curve shows:
Increasing marginal utility
Decreasing marginal utility
Zero marginal utility
Negative marginal utility
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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
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Supply
Demand
Production
Consumption
Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?
MC =AC and P
MC = AC and P=MR
P =MC and P
MC=MR and P =AR= ATC
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Complements
Close substitutes
Both a and b
None of the above
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% change in quantity demanded % change in income
% change in income % change in quantity demanded
Change in income Change in quantity demanded
None of the above
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R.G.D.Alien
J.R.Hicks
A.C.Pigou
None of the above
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Is not in equilibrium
Will not buy any banana
Will buy some banana but less than he buys of apples
Is willing to pay more for apples than bananas
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The external economies of scale experienced by a firm include the:
Growth of firms processing its waste materials
Development of research bureau serving the industry
Supply of suitable skilled labor in the area
All of the above
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Negative
Positive
Zero
Infinite
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Moves (shifts) towards the axis
Moves (shifts) away from the axis
Remains unchanged
All of the above
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Substitution Effect
Income Effect
Both substitution and income effect
None of them