CSS :: Equilibrium of firm Perfect Competition and Monopoly
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1. |
A firm decides to exit the industry when: |
A. |
AC strts rising |
B. |
MC starts rising |
C. |
Price is less than LAC |
D. |
TC starts rising |
Answer: Option C
Explanation:
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2. |
Profit is maximum when: |
A. |
TC and TR curves are parallel |
B. |
MC and MR curves are parallel |
C. |
TC and TR curves cross each other |
D. |
AC and AR curves cross each other |
Answer: Option A
Explanation:
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3. |
In monopoly and perfect competition the cost curves are: |
A. |
Same |
B. |
Different |
C. |
Opposite |
D. |
None of these |
Answer: Option A
Explanation:
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4. |
Normal profit is called normal because: |
A. |
It is neither very high nor very low |
B. |
It is minimum acceptable to the producer |
C. |
It is minimum which buyer wants to pay |
D. |
It is the maximum allowed by govt. |
Answer: Option B
Explanation:
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5. |
If a firm shuts down temporarily, it will incur loss equal to: |
Answer: Option C
Explanation:
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6. |
Under perfect competition: |
A. |
AC = AVC |
B. |
AR = AC |
C. |
AR = MC |
D. |
AR = MR |
Answer: Option D
Explanation:
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7. |
The necessary condition for equilibrium position of a firm is: |
A. |
MR = MC |
B. |
MC > Price |
C. |
MC = MR |
D. |
MC = AC |
Answer: Option C
Explanation:
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8. |
When a competitive firm achieves long run equilibrium then: |
A. |
P = MC |
B. |
MR = MC |
C. |
P = ATC |
D. |
All of the above |
Answer: Option D
Explanation:
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9. |
The most efficient scale of production of a firm is where: |
A. |
LAC is minimum |
B. |
SAC is minimum |
C. |
LMC is minimum |
D. |
SMC is minimum |
Answer: Option A
Explanation:
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10. |
A firm should shut down in the short run if it is not covering its: |
A. |
Variable cost |
B. |
Fixed cost |
C. |
Total cost |
D. |
Explicit cost (money outlays) |
Answer: Option A
Explanation:
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