Description : A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to - (1) Zero (2) One (3) Less than one (4) Infinity
Last Answer : (4) Infinity Explanation: Price elasticity of demand measures consumer response to price changes. If consumers are relatively sensitive to price changes, demand is elastic: if they are relatively ... keeps changing with the price. So the coefficient of price elasticity of demand is infinity.
Description : When cost of production is zero, monopoly equilibrium will be established at a level where elasticity of demand curve is : (a) Greater than one (b) Equal to one (c) Less than one (d) Infinity
Last Answer : Equal to one
Description : A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to (1) Zero (2) One (3) Less than one (4) Infinity
Last Answer : Infinity
Description : The relationship between elasticity of demand (e), Average Revenue (AR) and Marginal Revenue (MR) is shown by which of the following formula ? (a) e = MR / (AR – MR) (b) e = AR/MR (c) e = MR/AR (d) e = AR / (AR – MR)
Last Answer : (d) e = AR / (AR – MR)
Description : An employer goes on employing more and more of a factor units until : (1) the Average Revenue Productivity becomes equal to Marginal Revenue Productivity. (2) the Marginal Revenue Productivity becomes ... into operation. (4) the Marginal Revenue Productivity of a factor becomes equal to its reward.
Last Answer : (4) the Marginal Revenue Productivity of a factor becomes equal to its reward. Explanation: 'According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its ... marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
Last Answer : the Marginal Revenue Productivity of a factor becomes equal to its reward.
Description : Cross elasticity of demand between two perfect substitutes will be A.low B.high C.zero D.infinity
Last Answer : D.infinity
Description : firm's marginal revenue A.is always negative B.can be positive C.is always positive D.is zero at point at which the total revenue is maximum
Last Answer : D.is zero at point at which the total revenue is maximum
Description : Under Perfect Competition - (1) Marginal Revenue is less than the Average Revenue (2) Average Revenue is less than the Marginal Revenue (3) Average Revenue is equal to the Marginal Revenue (4) Average Revenue is more than the Marginal Revenue
Last Answer : (3) Average Revenue is equal to the Marginal Revenue Explanation: Perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous ... , as output will always occur where marginal cost is equal to marginal revenue (MC=MR).
Description : A firm is in equilibrium when its (1) marginal cost equals the marginal revenue (2) total cost is minimum (3) total revenue is maximum (4) average revenue and marginal revenue are equal
Last Answer : (1) marginal cost equals the marginal revenue Explanation: A consumer is in a state of equilibrium when he achieves maximum aggregate satisfaction on the expenditure that he makes depending on the ... its production. In short run Marginal revenue = Marginal Cost is the condition of equilibrium.
Description : The marginal revenue of a monopolist is: (1) more than price (2) equal to price (3) less than price (4) less than marginal cost
Last Answer : (3) less than price Explanation: A monopolist's marginal revenue is always less than or equal to the price of the good. Marginal revenue is the amount of revenue the firm receives for each additional unit ... - at the new level of output and total revenue at the previous output (one unit less).
Description : In a perfectly competitive market, a firm's - (1) Average Revenue is always equal to Marginal Revenue (2) Marginal Revenue is more than Average Revenue (3) Average Revenue is more than Marginal Revenue (4) Marginal Revenue and Average Revenue are never equal
Last Answer : (1) Average Revenue is always equal to Marginal Revenue Explanation: Average revenue is the amount money received by a firm per unit of output sold. Marginal revenue is the change in total revenue ... . In a perfectly competitive market, a firm's Average Revenue is always equal to Marginal Revenue.
Description : In pure monopoly, what is the relation between the price and the marginal revenue? a. the price is greater than the marginal revenue b. the price is less than the marginal revenue c. there is no relation d. they are equal
Last Answer : a. the price is greater than the marginal revenue
Description : A monopolist is able to maximise his profit when (a) his output is maximum (b) he charges higher prices (c) his average cost is minimum (d) his marginal cost is equal to marginal revenue
Last Answer : (d) his marginal cost is equal to marginal revenue
Description : In a perfectly competitive market, a firm’s (1) Average Revenue is always equal to Marginal Revenue (2) Marginal Revenue is more than Average Revenue (3) Average Revenue is more than Marginal Revenue (4) Marginal Revenue and Average Revenue are never equal
Last Answer : Average Revenue is always equal to Marginal Revenue
Last Answer : less than price
Description : Under Perfect Competition (1) Marginal Revenue is less than the Average Revenue (2) Average Revenue is less than the Marginal Revenue (3) Average Revenue is equal to the Marginal Revenue (4) Average Revenue is more than the Marginal Revenue
Last Answer : Average Revenue is equal to the Marginal Revenue
Last Answer : marginal cost equals the marginal revenue
Description : Equilibrium price in the market is determined by the - (1) equality between marginal cost and average cost. (2) equality between total cost and total revenue. (3) equality between average cost and average revenue. (4) equality between marginal cost and marginal revenue.
Last Answer : (4) equality between marginal cost and marginal revenue. Explanation: The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the ... in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
Description : The 'break-even' point is where (1) marginal revenue equals marginal cost (2) average revenue equals average cost, (3) total revenue equals total cost (4) None of the above
Last Answer : (3) total revenue equals total cost Explanation: Break-even is the point of balance between making either a profit or a loss. In economics & business, specifically cost accounting, the break ... although opportunity costs have been "paid", and capital has received the riskadjusted, expected return.
Description : Equilibrium output is deter-mined by: (1) the equality between total Variable cost and Marginal revenue. (2) the equality between Marginal cost and Marginal revenue. (3) the equality between Average cost and Average revenue. (4) the equality between total cost and total revenue.
Last Answer : (2) the equality between Marginal cost and Marginal revenue. Explanation: Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an ... because it adds to its profits. He stops producing more only when MC becomes equal to MR.
Description : The 'breali-even point' is where - (1) marginal revenue equals marginal cost (2) average revenue equals average cost (3) total revenue equals total cost (4) None of these
Last Answer : (2) average revenue equals average cost Explanation: The break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one ... been made, although opportunity costs have been "paid", and capital has received the riskadjusted, expected return.
Description : The equilibrium of a firm under perfect competition will be determined when - (1) Marginal Revenue > Average Cost (2) Marginal Revenue > Average Revenue (3) Marginal Revenue = Marginal Cost (4) Marginal Cost > Average Cost
Last Answer : (3) Marginal Revenue = Marginal Cost Explanation: 173. (3) When the marginal revenue productivity of a factor is equal to the marginal- cost (MR=MC) of the factor, the firm will be in ... revenue and marginal revenue (P = AR = MR) is the standard condition for a perfectly competitive firm.
Description : Exploitation of labour is said to exist when - (1) Wage = Marginal Revenue Product (2) Wage < Marginal Revenue Product (3) Wage > Marginal Revenue Product (4) Marginal Revenue Product =0
Last Answer : (2) Wage < Marginal Revenue Product Explanation: The term "exploitation" is used to denote the payment to labor of a wage less than its marginal revenue product. Under monopolistic competition, ... this sense. All firms hire labour until the marginal revenue product equals the marginal factor cost.
Description : Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its - (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve
Last Answer : (2) long-run average cost curve Explanation: Under perfect competition, the firms operate at the minimum point of long-run average cost curve. In this way, the actual longrun output of ... ideal output. This gives the mea-sure of excess capacity which lies unutilized under imperfect competition.
Description : If the average revenue is a horizontal straight line, marginal revenue will be - (1) U shaped (2) Kinked (3) Identical with average revenue (4) L shaped
Last Answer : (3) Identical with average revenue Explanation: The price of a good is also known as the Average Revenue of the firm. Average Revenue (AR) or Price and Marginal Revenue (MR) are identical. ... demand curve. Hence, the competitive demand curve is a horizontal straight line parallel to the OX axis.
Description : In equilibrium, a perfectly competitive firm will equate - (1) marginal social cost with marginal social benefit (2) market supply with market demand (3) marginal profit with marginal cost (4) marginal revenue with marginal cost
Last Answer : (4) marginal revenue with marginal cost Explanation: A perfectly competitive firm's supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost ... marginal cost curve. The marginal cost curve is thus the perfectly competitive firm's supply curve.
Description : Average Revenue means - (1) the revenue per unit of commodity sold (2) the revenue from all commodities sold (3) the profit realised from the marginal unit sold (4) the profit realised by sale of all commodities
Last Answer : (1) the revenue per unit of commodity sold Explanation: Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = ... of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Description : In order to maximize profits, a monopoly company will produce that quantity at which the: a. marginal revenue equals average total cost b. price equals marginal revenue c. marginal revenue equals marginal cost d. total revenue equals total cost
Last Answer : c. marginal revenue equals marginal cost
Description : 3. The demand for labor is the same as the a. marginal revenue product b. marginal physical product c. marginal cost d. wage
Last Answer : a. marginal revenue product
Description : 1. Which of the following concepts represents the extra revenue a firm receives from the services of an additional unit of a factor of production? a. total revenue b. marginal physical product c. marginal revenus product d. marginal revenue
Last Answer : c. marginal revenus product
Description : Demand curve is related to A.MU curve B.Marginal revenue C.Both (a) and (b)
Last Answer : C.Both (a) and (b)
Description : Difference between average cost and average revenue is (a) total profit (b) net profit © average profit (d) marginal profit
Last Answer : © average profit
Description : Equilibrium output is determined by: (1) the equality between total Variable cost and Marginal revenue. (2) the equality betweem Marginal cost and Marginal revenue. (3) the equality between Average cost and Average revenue. (4) the equality between total cost and total revenue.
Last Answer : the equality betweem Marginal cost and Marginal revenue.
Description : Equilibrium price in the market is determined by the (1) equality between marginal cost and average cost. (2) equality between total cost and total revenue. (3) equality between average cost and average revenue. (4) equality between marginal cost and marginal revenue.
Last Answer : equality between marginal cost and marginal revenue.
Description : If the average revenue is a horizontal straight line, marginal revenue will be (1) U shaped (2) Kinked (3) Identical with average revenue (4) L shaped
Last Answer : Identical with average revenue
Description : The equilibrium of a firm under perfect competition will be determined when (1) Marginal Revenue > Average Cost (2) Marginal Revenue > Average Revenue (3) Marginal Revenue = Marginal Cost (4) Marginal Cost > Average Cost
Last Answer : Marginal Revenue = Marginal Cost
Description : Exploitation of labour is said to exist when (1) Wage = Marginal Revenue Product (2) Wage < Marginal Revenue Product (3) Wage > Marginal Revenue Product (4) Marginal Revenue Product = 0
Last Answer : Wage < Marginal Revenue Product
Description : Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve
Last Answer : long-run average cost curve
Description : Under full cost pricing, price is determined (1) by adding a margin to the average cost (2) by comparing marginal cost and marginal revenue (3) by adding normal profit to the marginal cost (4) by the total cost of production
Last Answer : by adding a margin to the average cost
Description : The ‘break-even’ point is where (1) marginal revenue equals marginal cost (2) average revenue equals average cost (3) total revenue equals total cost (4) None of the above
Last Answer : total revenue equals total cost
Description : The ‘break-even point’ is where (1) marginal revenue equals marginal cost (2) average revenue equals average cost (3) total revenue equals total cost (4) None of these
Last Answer : average revenue equals average cost
Description : In equilibrium, a perfectly competitive firm will equate (1) marginal social cost with marginal social benefit (2) market supply with market demand (3) marginal profit with marginal cost (4) marginal revenue with marginal cost
Last Answer : marginal revenue with marginal cost
Description : Average Revenue means (1) the revenue per unit of commodity sold (2) the revenue from all commodities sold (3) the profit realised from the marginal unit sold (4) the profit realised by sale of all commodities
Last Answer : the revenue per unit of commodity sold
Description : If the main objective of the government is to raise revenue, it should tax commodities with (1) high elasticity of demand (2) low elasticity of supply (3) low elasticity of demand (4) high income elasticity of demand
Last Answer : (3) low elasticity of demand Explanation: The Ramsey rule states that commodities with low elasticities of demand should be taxed at higher rates than commodities with high elasticities of demand. ... the Ramsey rule may result in a regressive taxation scheme society may view as inequitable.
Description : Total revenue is maximum when elasticity of demand is (a) 3 (b) 1 © 0 (d) 0.5
Last Answer : (b) 1
Last Answer : low elasticity of demand
Description : In case of horizontal demand curve , price elasticity of demand is (a) equal to zero (b) equal to one © equal to two (d) infinite
Last Answer : (a) equal to zero
Description : When marginal cost is equal to marginal revenue, the firm should A)produce more to increase profits. B)produce less to decrease total costs. C)stop producing additional units to maximise profits. D)provide discounts to encourage purchases.
Last Answer : C)stop producing additional units to maximise profits.
Description : Average Revenue of a monopolist firm is (a) Always more than the Marginal revenue ; (b) Always less than the Marginal revenue; (c) Equal to marginal revenue ; (d) Any of the above three possible
Last Answer : (a) Always more than the Marginal revenue ;