Price Determinationin Different Market Quiz CA/CMA Foundation Chapter 4 Price Determination in Different Market Quiz 1 1 / 29 In Economics, the term ‘market’ refers to a: place where buyer and seller bargain a product or service for a price place where buyer does not bargain place where seller does not bargain none of the above 2 / 29 Market consists of __________. Buyer and Seller One price for one product at a given time Both (a) and (b) None 3 / 29 The Price Elasticity of demand of a firm in Pure Competition is : Infinite Finite Large Small 4 / 29 _________ conceived the “Time” element in markets and on the basis of this markets are classified into very short period, Short-Period, Long- Period & Very Long period. Alfred Marshall Schumpeter Adam Smith Paul Samuelson 5 / 29 Monopsony means __________. Where there are large firms There is a single buyer Small number of large buyers Single seller and single buyer 6 / 29 The classification of market on the basis of Area does not include __________. Local Market Regional Market Spot Market National Market Types of Market Structure 7 / 29 _________ implies that the time available is adequate for altering the supplies by altering even the fixed factors of production. Very Short Period Short Period Long Period Secular Period 8 / 29 Generally, perishable goods like butter, eggs, milk, vegetables etc., will have __________. Regional market Local market National market None of the above 9 / 29 When the commodities are sold in small quantities, it is called as __________. Retail Market Wholesale Market Small Market Local Market 10 / 29 __________ are those markets in which firm buy the resources they need (Land, Labour, Capital and entrepreneurship) to produce goods and services. Regular Markets Producer’s Markets Product Markets Factor Markets 11 / 29 The market for ultimate consumer is known as: Wholesale market Regulated market Unregulated market Retail market 12 / 29 Stock exchange market is an example of __________. unregulated market regulated market spot market none of the above 13 / 29 Secular period is also known as __________. very short period short period very long period long period 14 / 29 On the basis of nature of transactions, a market may be classified into: Spot market and future market Regulated market and unregulated market Wholesale market and retail market Local market and national market. 15 / 29 Marginal revenue can be defined as the change in total revenue resulting from the: Purchase of an additional unit of a commodity. Sales of an additional unit of a commodity. Sale of subsequent units of a product. None of the above. 16 / 29 If a seller obtains ₹ 3,000 after selling 50 units and ₹ 3,100 after selling 52 units, then marginal revenue will be: ₹ 59.62 ₹ 50.00 ₹ 60.00 ₹ 59.80 17 / 29 When price is ₹ 20, Quantity demanded is 10 units and price is decreased by 5% then quantity demand increased by 10% then Marginal revenue is __________. ₹ 10 ₹ 11 ₹ 9 ₹ 20 18 / 29 Average Revenue can be symboli-cally written as: MR/Q Price X quantity TR/Q none of the above 19 / 29 Average revenue is the revenue earned __________. per unit of input different units of input per unit of output different units of output 20 / 29 Average revenue curve is also known as: Profit Curve Demand Curve Average Cost Curve Indifference Curve 21 / 29 Average Revenue is also known as: price Income Revenue None of the above 22 / 29 The degree of control is very considerable in case of __________. Monopoly Perfect Competition Oligopoly None of these 23 / 29 In __________, there are few sellers who are selling competing products to many buyers. Monopoly Perfect Competition Oligopoly None of these 24 / 29 Which of the following Competition is characterized by many sellers who are selling identical products to many buyers? Perfect Competition Monopolistic Competition Monopoly Oligopoly 25 / 29 MR of nth unit is given by : TRn/TRn-1 TRn + TRn-1 TRn – TRn-1 All of these 26 / 29 Assume that when price is ₹ 20, the quantity demanded is 9 units, and when price is ₹ 19, the quantity demanded is 10 units. Based on this information, what is the marginal revenue resulting from an increase in output from 9 units to 10 units. ₹ 20 ₹ 19 ₹ 10 ₹ 1 27 / 29 Assume that when price is ₹ 20, the quantity demanded is 15 units, and when price is ₹ 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units? ₹ 18 ₹ 16 ₹ 12 ₹ 28 28 / 29 Total revenue = _______________. price × quantity price × income income × quantity none of the above 29 / 29 The amount realized by the firm by selling certain units of commodity is called as : Average Revenue Cost of Operations Total Revenue Marginal Revenue Your score isThe average score is 54% 0% Restart quiz CA/CMA Foundation Chapter 4 Price Determination in Different Market Quiz 3 1 / 30 Shift of the Demand curve to the means increase in demand. Right Left Downward No change in Demand Curve. 2 / 30 Suppose that a sole proprietorship is earning total revenues of 11,00,000 and is incurring explicit costs of ₹ 75,000 If the owner could work for another company for ₹ 30,000 a year, we would conclude that: The firm is incurring an economic loss. Implicit costs are ₹ 25,000. The total economic costs are ₹ 1,00,000. The individual is earning an economic profit of ₹ 25,000. 3 / 30 It is assumed in economic theory that: Decision making within the firm is usually undertaken by managers, but never by the owners. The ultimate goal of the firm is to maximize profits, regardless of firm size or type of business organization. As the firm’s size increases, so do its goals. the basic decision making unit of any firm is its owners. 4 / 30 Assume that consumers’ incomes and the number of sellers in the market for good A both decrease. Based upon this information, we can conclude, with certainty, that the equilibrium: Price will increase. Price will decrease. Quantity will increase. Quantity will decrease. 5 / 30 If supply increases in a greater proportion than demand __________. The new equilibrium price and quantity will be greater than the original equilibrium price and quantity. The new equilibrium price will be greater than the original equilibrium price but equilibrium quantity will be higher. The new equilibrium price and quantity will be lower than the original equilibrium price and quantity. The new equilibrium price will be lower than the original equi-librium and the new equilibrium quantity will be higher. 6 / 30 If the price of a commodity is fixed, then with every increase in its sold quantity the total revenue will __________ and the marginal revenue will __________. Increase, also increase Increase, decline Increase, remain unchanged Remain fixed, increase 7 / 30 If price is forced to stay below equilibrium price then consequently it can be said that: Excess supply exists Excess demand exists Either (a) or (b) Neither (a) nor (b) 8 / 30 Changes in Demand & Supply may be due to __________. Increase in Price Decrease in Price Change in determinants of Demand & other None of the above. 9 / 30 Which of the following may lead to changes in demand and Supply? Income and population Tastes and Preferences Technology & Prices of Factors of Production All of the above. 10 / 30 Suppose the technology for pro-ducing personal computers improves and, at the same time, individuals discover new uses for personal computers so that there is greater utilisation of personal computers. Which of the following will happen to equilibrium price and equilibrium quantity? Price will increase; quantity cannot be determined. Price will decrease; quantity cannot be determined. Quantity will increase; price cannot be determined. Quantity will decrease; price cannot be determined. 11 / 30 Which of these are characteristics of Perfect Competition. Many Sellers & Buyers Homogeneous Product Free Entry and Exit All of the above 12 / 30 __________ is a ideal Market. Monopoly Monopolistic Perfect Competition Oligopoly 13 / 30 Which of the following is not a condition of perfect competition? A large number of firms. Perfect mobility of factors. Informative advertising to ensure that consumers have good information. Freedom of entry and exit into and out of the market. 14 / 30 Under which of the following forms of market structure does a firm has no control over the price of its product: Monopoly Oligopoly Monopolistic competition Perfect competition 15 / 30 Which of the following is not an essential condition of pure competition? Large number of buyers and sellers Homogeneous product Freedom of entry Absence of transport cost 16 / 30 There can be simultaneous change in both demand and Supply. In that case, the equilibrium price will be __________. Increased Decreased Changes as per the Proportionate change in demand & Supply. None of the above 17 / 30 If demand increases without any corresponding increase in supply, there will be : Increase in equilibrium price Quantity sold increases Quantity purchased increases All of the above 18 / 30 When demand increases and supply __________, the equilibrium price __________ but nothing certain can be said about the change in equilibrium quantity. Decreases, decreases Decreases, rises Decreases, remain constant None of the above 19 / 30 When the Supply and demand curves shift in the some direction and both demand & and Supply __________, the equilibrium quantity __________ but the change in equilibrium price is __________. Increase, Increases, Uncertain Increase, Increases, Increases Increase, Increases, decreases None of the above 20 / 30 If demand does not change but there is an increase in supply due to improved technology, then : Demand Curve will shift to the right. Demand Curve will shift to the Left. Supply curve will shift to the right. Supply curve will shift to the Left. 21 / 30 One of the following is not correct about perfect competition: Purchase and Sale of homogeneous goods Existence of marketing costs Absence of transportation costs Perfect mobility of factors of production. 22 / 30 A market structure in which many firms sell products that are similar and identical is known as __________. Monopolistic competition Monopoly Perfect competition Oligopoly 23 / 30 Which of the following is not a characteristic of a competitive market? There are many buyers and sell-ers in the market. The goods offered for sales are largely the same. Firms generate small but positive supernormal profits in the long run. Firms can freely enter or exit the market. 24 / 30 Agricultural goods markets depict characteristics close to: Perfect competition. Oligopoly Monopoly Monopolistic competition. 25 / 30 One of the essential conditions of Perfect Competition is : Product differentiation Many sellers and few buyers Only one price for identical goods at any one time Multiplicity of prices for identical product at any one time 26 / 30 A perfect market is characterized by __________. Existence of large number of buyers and sellers Homogenous products Perfect knowledge of the market All of the above 27 / 30 Demand curve is equal to M.R. curve in which market? Oligopoly Monopoly Monopolistic Competition Perfect Competition 28 / 30 MR Curve = AR = Demand Curve is a feature of which kind of Market? Perfect Competition Monopoly Monopolistic Oligopoly 29 / 30 The firm in a perfectly competitive market is a price-taker. This designation as a price-taker is based on the assumption that __________. The firm has some, but not complete, control over its product price. There are so many buyers and sellers in the market that any individual firm cannot affect the market. Each firm produces a homoge-neous product. There is easy entry into or exit from the market place. 30 / 30 Price-taking firms, i.e., firms that operate in a perfectly competitive market, are said to be “small” relative to the market. Which of the following best describes this smallness? The individual firm must have fewer than 10 employees. The individual firm faces a downward-sloping demand curve. The individual firm has assets of less than ₹ 20 lakhs. The individual firm is unable to affect market price through its output decisions. Your score isThe average score is 48% 0% Restart quiz CA/CMA Foundation Chapter 4 Price Determination in Different Market Quiz 4 1 / 30 Price-taking firms, i.e., firms that operate in a perfectly competitive market, are said to be “small” relative to the market. Which of the following best describes this smallness? The individual firm must have fewer than 10 employees. The individual firm faces a downward-sloping demand curve. The individual firm has assets of less than ₹ 20 lakhs. The individual firm is unable to affect market price through its output decisions. 2 / 30 Which of these are characteristics of Perfect Competition. Many Sellers & Buyers Homogeneous Product Free Entry and Exit All of the above 3 / 30 __________ is a ideal Market. Monopoly Monopolistic Perfect Competition Oligopoly 4 / 30 Which of the following is not a condition of perfect competition? A large number of firms. Perfect mobility of factors. Informative advertising to ensure that consumers have good information. Freedom of entry and exit into and out of the market. 5 / 30 Under which of the following forms of market structure does a firm have no control over the price of its product? Monopoly Monopolistic Completion Oligopoly Perfect Competition. 6 / 30 Which of the following statement is not correct? Under monopoly there is no difference between a firm and industry. A monopolist may restrict the output and raise the price. Commodities offered for sale under a perfect completion will be heterogeneous. Product differentiation is peculiar to monopolistic completion. 7 / 30 The condition for pure competition is: Large number of buyer and seller, free entry and exist. Homogeneous product. Both (a) and (b). Large number of buyer and seller, homogeneous product, perfect knowledge about the product. 8 / 30 Which of the following markets would most closely satisfy the require-ments for a perfectly competitive Market? Electricity Cable television Cola Milk 9 / 30 The price elasticity of demand for a product is infinite under: Perfect competition Monopolistic competition Monopoly Oligopoly 10 / 30 Under which of the following form of market structure does a firm have no control over the price of its production? Monopoly Monopolistic Competition Oligopoly Perfect Competition 11 / 30 Under which of the following form of market structure does a firm have no control over the price of its production? Monopoly Monopolistic Competition Oligopoly Perfect Competition 12 / 30 One of the following is not correct about perfect competition: Purchase and Sale of homogeneous goods Existence of marketing costs Absence of transportation costs Perfect mobility of factors of production. 13 / 30 A market structure in which many firms sell products that are similar and identical is known as __________. Monopolistic competition Monopoly Perfect competition Oligopoly 14 / 30 Which of the following is not a characteristic of a competitive market? There are many buyers and sell-ers in the market. The goods offered for sales are largely the same. Firms generate small but positive supernormal profits in the long run. Firms can freely enter or exit the market. 15 / 30 Agricultural goods markets depict characteristics close to: Perfect competition. Oligopoly. Monopoly. Mononopolistic competition. 16 / 30 One of the essential conditions of Perfect Competition is : Product differentiation Many sellers and few buyers Only one price for identical goods at any one time Multiplicity of prices for identical product at any one time 17 / 30 A perfect market is characterized by __________. Existence of large number of buyers and sellers Homogenous products Perfect knowledge of the market All of the above 18 / 30 Demand curve is equal to M.R. curve in which market? Oligopoly Monopoly Monopolistic Competition Perfect Competition 19 / 30 MR Curve = AR = Demand Curve is a feature of which kind of Market? Perfect Competition Monopoly Monopolistic Oligopoly 20 / 30 The firm in a perfectly competitive market is a price-taker. This designation as a price-taker is based on the assumption that __________. The firm has some, but not complete, control over its product price. There are so many buyers and sellers in the market that any individual firm cannot affect the market. Each firm produces a homoge-neous product. There is easy entry into or exit from the market place. 21 / 30 Perfectly Competitive markets have __________ transactions Costs. Absolutely no Very Low High Very high 22 / 30 Which out of these are not a fea-ture of perfect competition? Homogeneous Large number of buyer and sell-ers Free entry and exist Selling cost. 23 / 30 The Condition of perfect Competition are fulfilled to same extent in case of __________. Agricultural Products Financial Instruments Precious Metals All of the above 24 / 30 The essential feature of Pure competition is __________. Presence of Monopoly Absence of Monopoly Dual existence of Pure Competition & Monopoly All of the above. 25 / 30 What is incorrect about Perfect Competition? All Firms are Price takers. Firms have to accept the price determined by the market forces of total demand & total supply. The assumption of Price taking does not applies to Consumers. All are incorrect. 26 / 30 Under which of the following forms of market structure does a firm have no control over the price of its product? Monopoly Monopolistic Completion Oligopoly Perfect Competition. 27 / 30 Which of the following statement is not correct? Under monopoly there is no difference between a firm and industry. A monopolist may restrict the output and raise the price. Commodities offered for sale under a perfect completion will be heterogeneous. Product differentiation is peculiar to monopolistic completion. 28 / 30 The condition for pure competition is: Large number of buyer and seller, free entry and exist. Homogeneous product. Both (a) and (b). Large number of buyer and seller, homogeneous product, perfect knowledge about the product. 29 / 30 Which of the following markets would most closely satisfy the require-ments for a perfectly competitive Market? Electricity Cable television Cola Milk 30 / 30 The price elasticity of demand for a product is infinite under: Perfect competition Monopolistic competition Monopoly Oligopoly Your score isThe average score is 0% 0% Restart quiz CA/CMA Foundation Chapter 4 Price Determination in Different Market Quiz 4 1 / 30 In perfect competition, since the firm is a price taker, the __________ curve is a straight line : Marginal cost Total cost Total revenue Marginal revenue 2 / 30 Which of the following is not a characteristic of a “price-taker”? TR = P X Q AR = Price Negatively – sloped demand curve Marginal Revenue = Price 3 / 30 What is the shape of the demand curve faced by a firm under perfect competition? Horizontal Vertical Positively sloped Negatively sloped 4 / 30 A firm is said to be in equilibrium when __________. It is maximizing its profits It has no incentive to expand production It has no incentive to contract production All of the above. 5 / 30 Who sets the price of the product under perfect competition? Government Consumers Sellers Both buyers and sellers 6 / 30 Equilibrium price for an industry in perfect competition is fixed through. Market demand and market Supply Market demand and market Supply Market demand and firms supply None of the above 7 / 30 Price under perfect competition is determined by the __________. Firm Industry Government Society 8 / 30 In case of perfect Competition, the industry is in equilibrium, when __________. There is enough demand of products in the market. There is enough supply of products in the market. Total output of the industry is equal to the total demand. Total output is less than the quantity demanded. 9 / 30 An industry in economic termi-nology consists of a __________ number of firms. Large, independent Large, dependent Small, independent Small, dependent 10 / 30 Which of the following statement is correct? Price rigidity is an important feature of monopoly. Selling cost are possible under perfect completion. An industry consists of many firm. Under perfect completion factor of production do not move freely as these are legal restriction. 11 / 30 Perfectly Competitive markets have __________ transactions Costs. Absolutely no Very Low High Very high 12 / 30 Which out of these are not a fea-ture of perfect competition? Homogeneous Large number of buyer and sell-ers Free entry and exist Selling cost. 13 / 30 The Condition of perfect Competition are fulfilled to same extent in case of __________. Agricultural Products Financial Instruments Precious Metals All of the above 14 / 30 The essential feature of Pure competition is __________. Presence of Monopoly Absence of Monopoly Dual existence of Pure Competition & Monopoly All of the above. 15 / 30 What is incorrect about Perfect Competition? All Firms are Price takers. Firms have to accept the price determined by the market forces of total demand & total supply. The assumption of Price taking does not applies to Consumers. All are incorrect. 16 / 30 Under which of the following forms of market structure does a firm have no control over the price of its product? Monopoly Monopolistic Completion Oligopoly Perfect Competition. 17 / 30 Which of the following statement is not correct? Under monopoly there is no difference between a firm and industry. A monopolist may restrict the output and raise the price. Commodities offered for sale under a perfect completion will be heterogeneous. Product differentiation is peculiar to monopolistic completion. 18 / 30 The condition for pure competition is: Large number of buyer and seller, free entry and exist. Homogeneous product. Both (a) and (b). Large number of buyer and seller, homogeneous product, perfect knowledge about the product. 19 / 30 Which of the following markets would most closely satisfy the require-ments for a perfectly competitive Market? Electricity Cable television Cola Milk 20 / 30 The price elasticity of demand for a product is infinite under: Perfect competition Monopolistic competition Monopoly Oligopoly 21 / 30 Perfectly competitive firm faces: Perfectly elastic demand curve Perfectly inelastic demand curve Zero Negative 22 / 30 Under which of the following market structure AR of the firm will be equal to MR? Monopoly Monopolistic Competition Oligopoly Perfect Competition 23 / 30 Price taker firms __________. Do not advertise their product because it misleads the custom-ers. Advertise their products to boost the level of demand. Do not advertise but give gifts along with the sold items to attract customers. Do not advertise because they can sells as much as they wish at the prevailing price. 24 / 30 Under which Market Situation demand curve is linear and parallel to X axis: Perfect Competition Monopoly Monopolistic Competition Oligopoly 25 / 30 Under perfect competition a firm is the __________. price-maker and not price-taker price-taker and not price-maker neither price-maker nor price- taker none of the above 26 / 30 Under which of the following market structure AR of the firm will be equal to MR? Monopoly Monopolistic Competition Oligopoly Perfect Competition 27 / 30 What is the shape of perfectly competitive Average Revenue Curve? Parallel to X axis Parallel to Y axis Fall from left to right Rise from left to right 28 / 30 Which of the following statements is accurate regarding a perfectly com-petitive firm? Demand curve is downward slop¬ing The demand curve always lies above the marginal revenue curve Average revenue need not be equal to price Price is given and is determined by the equilibrium in the entire market 29 / 30 For a price-taking firm : Marginal revenue is less than price. Marginal revenue is equal to price. Marginal revenue is greater than price. The relationship between mar-ginal revenue and price is inde-terminate. 30 / 30 Average revenue curve is also known as: Profit curve Demand curve Supply curve Average cost curve Your score isThe average score is 0% 0% Restart quiz CA/CMA Foundation Chapter 4 Price Determination in Different Market Quiz 5 1 / 35 Condition for producer equilib-rium is: TR = TVC MC = MR TC = TAC None of these 2 / 35 For maximum profit, the condition is: AR = AC MR = MC MR = AR MC = AR 3 / 35 Which is the first order condition for the profit of a firm to be maximum? AC = MR MC = MR MR = AR AC = AR 4 / 35 Which of the following Statement is false as regards Perfect Competition? Firm is said to be in equilibrium when it maximizes its profit. The output which gives maxi-mum profit to the firm is called equilibrium output. In the equilibrium State, the firm has no incentive either to increase or decrease its output. Firms in a Competitive market are Price Makers. 5 / 35 Which perfect completion firm is described as: Price taker and not price maker. Price maker and not price taker. Neither price maker nor price taker. None of the above. 6 / 35 Which of the following is incor-rect? Even monopolistic can earn losses. Firms in perfect competitive market is price taker. It is always beneficial for a firm in a perfectly competitive market to discriminative prices. Kinked demand curve is related to an oligopolistic market. 7 / 35 The firm in a perfectly competitive market is a price taker. This designation as a price taker is based on the assumption that: The firm has some but not com-plete control over its product price. There are so many buyers and sellers in the market that any one buyer or seller cannot affect the market. Each firm produces a homoge-neous product. There is easy entry into or exist from the market place. 8 / 35 In perfect Competition when the firm is a price taker, which curve among the following will be a straight line? Marginal Cost Average Cost Total Cost Marginal Revenue 9 / 35 MR Curve in perfect competition is __________. Parallel to X-axis Parallel to Y-axis Fall from left to right Rise from left to right 10 / 35 Which of the following is not the characteristic of MR? When TR is minimum, the MR is zero MR can be negative MR slopes downward from left to right MR Curve is below AR Curve 11 / 35 A purely competitive firm’s supply schedule in the short run is determined by __________. Its average revenue. Its marginal revenue. Its marginal utility for money curve. Its marginal cost curve. 12 / 35 At the equilibrium position of a firm Under perfect Competition, __________. The Marginal revenue is equal to the marginal Cost. The MC Curve cuts MR Curve from below. Both (a) & (b) Either (a) or (b) 13 / 35 In the short run, a firm operates with a __________ amount of capital and must choose the level of its __________ so as to __________ profit. Fixed, Variable inputs, maximize Variable, fixed inputs, minimize Fixed, Fixed inputs, maximize Valuable, Variable inputs, mini-mize. 14 / 35 Demand curve is horizontal in the case of __________. Monopoly Perfect Competition Imperfect Competition Monopolistic Competition 15 / 35 Condition for equilibrium of firm: MR = MC AR = AC MC curve cuts MR curve from below Both (a) and (c) 16 / 35 Average revenue curve is also known as: Profit Curve Demand Curve Average Cost Curve Indifference Curve 17 / 35 Which is the first order condition for the firm to maximize the profit __________. AC = MR AC = MR MC = MR MR = AR 18 / 35 The firm will attain equilibrium at a point where MC curve cuts from below __________. AR curve MR curve AC curve AVC curve 19 / 35 In a perfectly competitive market the demand curve of a firm is: Elastic Perfectly elastic Inelastic Perfectly inelastic 20 / 35 In market, the price and output equilibrium is determined on the basis of: Total revenue and total cost Total cost and marginal cost Marginal revenue and marginal cost Only marginal cost 21 / 35 When __________, we know that the firms must be producing at the minimum point of the average cost curve and so there will be productive efficiency. AC = AR MC = AC MC = MR AR = MR 22 / 35 When __________, we know that the firms are earning just normal profits. AC = AR MC = MR MC = AC AR = MR 23 / 35 If a perfectly competitive firms earns super normal profits then __________. AR > MR AR < MR AR = MR None of the above 24 / 35 In a perfectly competitive market, if MR is greater than MC, then a firm should: Increase its production Decease its production Decrease its sales Increase its sales 25 / 35 In a perfectly competitive market, if MR is greater than MC, then a firm should __________. Increase its production Decrease its production Decrease its sales Increase its sales 26 / 35 When AR = ₹ 10 and AC = ₹ 8 the firm makes __________: Normal profit Net profit Gross profit Super normal profit 27 / 35 The total Cost of production is ₹ 40,000 (1,000 units). If the firm is selling the product at ₹ 45 per unit, it is earning . Normal Profits @ ₹ 5 Per Unit Normal Profits @ ₹ 45 Per Unit Super normal profits @ ₹ 5 Per Unit Super Normal profits @ ₹ 45 Per Unit 28 / 35 When the average revenues are more than its average total Cost, the Firm is said to have earned: Normal Profits Super Normal Profits Exceptional Profits Expected Profits. 29 / 35 As regards short run supply curve of the firm in a Competitive market, for Prices __________ Average Variable Cost, the firm will Supply __________ units because the firm is to __________ meet even its variable Cost. Above, maximum. Unable Below, Zero, Unable Above, Maximum, able Below, Zero, able 30 / 35 In a perfectly Competitive Indus-try, the MC Curve of a firm depicts. The industry demand Curve The Firm’s demand Curve The industry’s supply Curve The Firm’s supply Curve. 31 / 35 When __________, there will be a locative efficiency meaning thereby that the cost of the last unit is exactly equal to the price consumers are willing to pay for it and so that the right goods are being sold to the right people at the right price. MC = MR MC = AC MC = AR AR = MR 32 / 35 A firm will close down in the short period, if its AR is less than: AC AVC MC None of the above 33 / 35 A competitive firm in the short run incur losses. The firm continues production, if: P > AVC P = AVC P < AVC P > = AVC 34 / 35 If under perfect competition, the price line lies below the average cost curve, the firm would: Make only Normal profits Incur losses Make abnormal profit Profit cannot be determined 35 / 35 A firm encounters its “shutdown point” when: Average total cost equals price at the profit-maximizing level of output. Average variable cost equals price at the profit-maximizing level of output. Average fixed cost equals price at the profit-maximizing level of output. Marginal cost equals price at the profit-maximizing level of output. Your score isThe average score is 42% 0% Restart quiz
