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Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?

A. MC =AC and P

B. MC = AC and P=MR

C. P =MC and P

D. MC=MR and P =AR= ATC

Correct Answer :

D. MC=MR and P =AR= ATC


Related Questions

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4

Production is a function of:

A. Profits

B. Costs

C. Inputs

D. Price

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In monopolistic competition, the firm compete on the basis of:

A. Price

B. Entry

C. Both a and b

D. None of the above

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4

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:

A. Rise by the amount of the tax

B. Rise by more than the amount of the tax

C. Rise by less than the amount of the tax

D. Remain the same

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4

According to Saint Thomas Aquinas value is determined by God, but prices by:

A. Consumers

B. Employees

C. People

D. Labor

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The total utility is gained by consuming:

A. The last unit of a good

B. All the units of a good

C. The first unit of a good

D. The average unit of a good

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4

In the theory of firm, Chamberline presented the idea of:

A. Rising cost

B. Falling cost

C. Rising input

D. Falling input

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The maximization of output subject to cost requires equilibrium at the:

A. Lowest isoquant

B. Lowest isocost line

C. Highest isoquant

D. Highest isocost line

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Which of the following formula determine the income elasticity of demand?:

A. Proportionate change in demand Proportionate change in price

B. Proportional change in the purchase of Y Proportional change in the price of X

C. Proportionate change in demand Proportionate change in income

D. Proportionate change in demand Proportionate change in price

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The games which played by players again and again are called:

A. Repeated games

B. Cooperative games

C. Non-cooperative games

D. Constant games

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4

The expansion point is attained by joining:

A. Similar optimal combinations

B. Different optimal combinations

C. Both of them

D. None of them

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4

When total revenue (TR) falls in monopoly then elasticity of demand is:

A. E =1

B. E >1

C. E <1

D. E =0

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Income -elasticity of demand will be zero when a given change in income brings about:

A. A less than proportionate change in quantity demanded

B. A more than proportionate change in quantity demanded

C. The same proportionate change in quantity demanded

D. No change in quantity demanded

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In monopolistic competition, the individual demand curve is also known as:

A. Planned products curve

B. Planned material curve

C. Planned costs curve

D. Planned sales curve

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Marginal utility means:

A. Utility derived from the last unit of production

B. Utility derived from the last unit of a commodity which is being consumed

C. Total utility- Average utility

D. None of the above

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The Strategy of Economic Development is the work of:

A. S.Kuznets

B. H.Liebenstein

C. A.O.Hirshman

D. Alfred Marshal

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In repeated game, the Prisoners Dillemma can have a:

A. Non-cooperative outcome

B. Cooperative outcome

C. Dominant behavior

D. Recessive behavior

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An exceptional demand curve is:

A. Downward sloping

B. Upward sloping

C. Horizontal straight line

D. Vertical straight line

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We can obtain consumers demand curve from:

A. Income Consumption Curve (ICC)

B. Engels Curve

C. Price Consumption Curve (PCC)

D. Production Possibility Curve (PPC)

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Price elasticity of demand can be measured in the following way:

A. Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity

B. Change in quantity demanded of a commodity divided by change in price of that commodity

C. Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity

D. None of that commodity

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A firm can never produce in the middle area of input space, in case of:

A. Concave isoquant

B. Convex isoquant

C. Constant isoquant

D. None of the above

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Each short run average cost curve:

A. Has to touch the long run cost curve

B. Has to cross the long run cost curve

C. Has to lie above all points on the long run cost curve

D. Coincides with the long run cost curve at some point

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At a point above the middle of a straight line demand curve, elasticity of demand is:

A. Less than one

B. Equal to one

C. More than one

D. Equal to infinite

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The production possibility curve (PPC) is concerned with:

A. Resources of the economy

B. Interests of the economy

C. Limitations of the economy

D. Qualities of the economy

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Two policy variables, product and selling activities in the theory of firm was introduced by:

A. Chamberline

B. Sraffa

C. Carl marx

D. Robinson

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In Recardian theory of value, the stress has been made on:

A. Marginal cost

B. Production cost

C. Labor cost

D. Supply cost

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A maximin strategy:

A. Maximizes the minimum gain that can be earned

B. Maximizes the gain of one player, but minimizes the gain of the opponent

C. Minimizes the maximum gain that can be earned

D. None of the above

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The substitution effect works to encourage a consumer to purchase more of a product when the price of that good is falling because:

A. The consumers real income has increased

B. The consumers real income has decreased

C. The product is now relatively less expensive than before

D. Other products are now less expensive than before

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4

In modern theory of costs, a firm normally utilizes:

A. 2/3 of capacity of its plants

B. 3/4 of capacity of its plants

C. 1/3 of capacity of its plants

D. 1/2 of capacity of its plants

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The marginal revenues are derivatives of:

A. TR function

B. AR function

C. MR function

D. AP function

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In monopolistic competition (also in kinked demand curve model), a firm sells the amount where:

A. Individual demand curve (IDC) is equal to proportional demand curve (PDC)

B. Individual demand curve (IDC) is greater than proportional demand curve (PDC)

C. Individual demand curve (IDC) is less than proportional demand curve (PDC)

D. None of the above