In the long run a firm in perfect competition earns (a) Normal profit only ; (b) Abnormal profit ; (c) Average profit of past five years; (d) 12.33% profit on capital employed

In the long run a firm in perfect competition earns (a) Normal profit only ; (b) Abnormal profit ; (c) Average profit of past five years; (d) 12.33% profit on capital employed
by

1 Answer

Answer :

(a) Normal profit only ;
by

Related questions

Which of the following statement is true (a) In perfect competition Average and Marginal revenue are identical (b) In perfect competition Average and Marginal cost are identical (c) In perfect competition Average price and Marginal cost are identical (d) In perfect competition only normal profit can be earned by a firm

Description : Which of the following statement is true (a) In perfect competition Average and Marginal revenue are identical (b) In perfect competition Average and Marginal cost are identical (c) In perfect competition ... cost are identical (d) In perfect competition only normal profit can be earned by a firm

Last Answer : (a) In perfect competition Average and Marginal revenue are identical

In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to (a) Price discrimination;(b)Cost effectiveness ; (c) Banned entry of new firms ; (d) Sales promotion

Description : In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to (a) Price discrimination;(b)Cost effectiveness ; (c) Banned entry of new firms ; (d) Sales promotion

Last Answer : (c) Banned entry of new firms ;

Under perfect market conditions a firm is said to be in equilibrium where (a) Total output is equal to total demand ; (b) Profit is the maximum; (c) Where the total revenue is maximum ; (d) Where total average cost is the minimum

Description : Under perfect market conditions a firm is said to be in equilibrium where (a) Total output is equal to total demand ; (b) Profit is the maximum; (c) Where the total revenue is maximum ; (d) Where total average cost is the minimum

Last Answer : (b) Profit is the maximum; 

The demand curve of a Monopoly firm is – (a) Same that of a firm in a perfect competition ; (b) Same as that of the total market demand; (c) Non-exist ; (d) Perfectly elastic

Description : The demand curve of a Monopoly firm is – (a) Same that of a firm in a perfect competition ; (b) Same as that of the total market demand; (c) Non-exist ; (d) Perfectly elastic

Last Answer : (b) Same as that of the total market demand;

In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes (a) Profits and new firms join the market ; (b) Profit and bar entry to new firms; (c) Makes losses and exit the market ; (d) Quick profit and disappears

Description : In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes (a) Profits and new firms join the market ; (b) Profit and bar entry to new firms; (c) Makes losses and exit the market ; (d) Quick profit and disappears

Last Answer : (a) Profits and new firms join the market ;

In the long-run equilibrium, a competitive firm earns - (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Description : In the long-run equilibrium, a competitive firm earns - (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Last Answer : (3) Normal profit Explanation: Making the assumption that the market demand curve remains unchanged, higher market supply will reduce the equilibrium market price until the price = long run average cost. ... of firms in and out of the industry and a long-run equilibrium has been established.

In the long-run equilibrium, a competitive firm earns (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Description : In the long-run equilibrium, a competitive firm earns (1) Super-normal profit (2) Profits equal to other firms (3) Normal profit (4) No profit

Last Answer :  Normal profit

…………… has excess production capacity in the long run (a) Perfect competition market ; (b) Monopolistic competition market ; (c) Oligopolistic market (d) None

Description : …………… has excess production capacity in the long run (a) Perfect competition market ; (b) Monopolistic competition market ; (c) Oligopolistic market (d) None

Last Answer :  (b) Monopolistic competition market ;

Total profit of a firm in a perfect competitive market is – (a) Total revenue less total cost ; (b) Marginal revenue less marginal cost; (c) Total revenue less marginal cost ; (d) Total revenue less variable cost

Description : Total profit of a firm in a perfect competitive market is – (a) Total revenue less total cost ; (b) Marginal revenue less marginal cost; (c) Total revenue less marginal cost ; (d) Total revenue less variable cost

Last Answer : (a) Total revenue less total cost ;

What will happen if a firm in perfect competitive market, increase its output by 50% (a)Total sales revenue will also increase by 50% ; (b) (b)Selling price will come down by 50%; (c)Total sales revenue will decrease by 50% ; (d)Profit will increase by 25%

Description : What will happen if a firm in perfect competitive market, increase its output by 50% (a)Total sales revenue will also increase by 50% ; (b) (b)Selling price will come down by 50%; (c)Total sales revenue will decrease by 50% ; (d)Profit will increase by 25%

Last Answer : (a)Total sales revenue will also increase by 50% ;

In short run a monopolistic competition firm will be in equilibrium where (a) MR = curve intersect SMC curve from above (b) MR curve intersect SMC curve from below (c) MC = AR ; (d) MR curve intersect SMC from below and P is equal to or more than AVC

Description : In short run a monopolistic competition firm will be in equilibrium where (a) MR = curve intersect SMC curve from above (b) MR curve intersect SMC curve from below (c) MC = AR ; (d) MR curve intersect SMC from below and P is equal to or more than AVC

Last Answer : ; (d) MR curve intersect SMC from below and P is equal to or more than AVC

At "Break-even point", (1) the industry is in equilibrium in the long run. (2) the producers suffers the minimum losses (3) the seller earns maximum profit (4) the firm is at zero-profit point

Description : At "Break-even point", (1) the industry is in equilibrium in the long run. (2) the producers suffers the minimum losses (3) the seller earns maximum profit (4) the firm is at zero-profit point

Last Answer : (4) the firm is at zero-profit point 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 has "broken even." For businesses, reaching the break-even point is the first major step towards profitability.

At “Break-even point”, (1) the industry is in equilibrium in the long-run. (2) the producers suffers the minimum losses (3) the seller earns maximum profit (4) the firm is at zero-profit point

Description : At “Break-even point”, (1) the industry is in equilibrium in the long-run. (2) the producers suffers the minimum losses (3) the seller earns maximum profit (4) the firm is at zero-profit point 

Last Answer : the firm is at zero-profit point

Which of the following statement is true (a) Monopolist are price takers ; (b) Monopoly firm earn abnormal profits; (c) A Monopoly firm faces straight demand line ; (d) Supply curve of a monopoly firm is positive sloped

Description : Which of the following statement is true (a) Monopolist are price takers ; (b) Monopoly firm earn abnormal profits; (c) A Monopoly firm faces straight demand line ; (d) Supply curve of a monopoly firm is positive sloped

Last Answer : (a) Monopolist are price takers ;

If a firm is operating at any point inside the PPF, the firm is (a) Efficient firm ; (b) Inefficient firm ; (c) Poised for abnormal growth ; (d) None

Description : If a firm is operating at any point inside the PPF, the firm is (a) Efficient firm ; (b) Inefficient firm ; (c) Poised for abnormal growth ; (d) None

Last Answer :  (b) Inefficient firm

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

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.

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

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

A firm that makes profit in excess of normal profit is earning (a) Economic profit ; (b) Costing profit ; (c) Normal profit ; (d) Super normal profit

Description : A firm that makes profit in excess of normal profit is earning (a) Economic profit ; (b) Costing profit ; (c) Normal profit ; (d) Super normal profit

Last Answer : ; (d) Super normal profit

A firm that break even after all the economic costs are paid in earning (a) Economic profit ; (b) Accounting profit ; (c) Normal profit ; (d) Super normal profit

Description : A firm that break even after all the economic costs are paid in earning (a) Economic profit ; (b) Accounting profit ; (c) Normal profit ; (d) Super normal profit

Last Answer :  (c) Normal profit ;

A competitive firm maximizes its total profit when ……………… (a) Average cost equal average realization ; (b) Marginal cost equals Price; (d) Total revenue is the maximum ; (d) MR = AR

Description : A competitive firm maximizes its total profit when ……………… (a) Average cost equal average realization ; (b) Marginal cost equals Price; (d) Total revenue is the maximum ; (d) MR = AR

Last Answer : (d) Total revenue is the maximum ;

Under perfect market conditions an Industry is said to be in equilibrium where (a) Total output is equal to total demand ; (b) Profit is maximum (c) Where the total revenue is maximum ; (d) Where total average cost is the minimum

Description : Under perfect market conditions an Industry is said to be in equilibrium where (a) Total output is equal to total demand ; (b) Profit is maximum (c) Where the total revenue is maximum ; (d) Where total average cost is the minimum

Last Answer : (a) Total output is equal to total demand ;

The market state that satisfy all the essential features of a perfect competitive market except identity of product is known as (a) Oligopoly ; (b) Duopoly ; (c) Monopoly ; (d) Monopolistic competition

Description : The market state that satisfy all the essential features of a perfect competitive market except identity of product is known as (a) Oligopoly ; (b) Duopoly ; (c) Monopoly ; (d) Monopolistic competition

Last Answer : (d) Monopolistic competition

Under perfect market conditions the supply curve of a firm is represented by (a) MC curve ; (b) MR curve ; (c) AR curve ; (d) AC curve

Description : Under perfect market conditions the supply curve of a firm is represented by (a) MC curve ; (b) MR curve ; (c) AR curve ; (d) AC curve 

Last Answer : (a) MC curve ; 

Which of the following are limitations of break-even analysis? A. Static concept B. Capital employed is taken into account. C. Limitation of non-linear behaviour of costs D. Limitation of presence of perfect competition

Description : Which of the following are limitations of break-even analysis? A. Static concept B. Capital employed is taken into account. C. Limitation of non-linear behaviour of costs D. Limitation of presence of perfect competition

Last Answer : A. Static concept

The negatively sloped part of long run cost curve of a firm is due to (a) Increase in production due to specialization and division of labour; (b) Diseconomies of scale ; (c) Diminishing returns to scale ; (d) Marginal utility theory

Description : The negatively sloped part of long run cost curve of a firm is due to (a) Increase in production due to specialization and division of labour; (b) Diseconomies of scale ; (c) Diminishing returns to scale ; (d) Marginal utility theory

Last Answer : (a) Increase in production due to specialization and division of labour;

The positively sloped part of long run cost curve of a firm is due to (a) Economies of scale ; (b) Diseconomies of scale; (c) Diminishing returns to scale ; (d) Marginal utility theory

Description : The positively sloped part of long run cost curve of a firm is due to (a) Economies of scale ; (b) Diseconomies of scale; (c) Diminishing returns to scale ; (d) Marginal utility theory

Last Answer : (b) Diseconomies of scale;

A monopoly firm makes more profit because (a) It has ability to choose among price and output combination ; (b) It can discriminate price; (c) It leave the consumer with no consumer surplus ; (d) it acts as a market leader

Description : A monopoly firm makes more profit because (a) It has ability to choose among price and output combination ; (b) It can discriminate price; (c) It leave the consumer with no consumer surplus ; (d) it acts as a market leader

Last Answer : (a) It has ability to choose among price and output combination ;

In the short run an oligopolistic firm will (a) Make profits ; (b) Incur losses ; (c) Just break even ; (d) Any of these three are possible

Description : In the short run an oligopolistic firm will (a) Make profits ; (b) Incur losses ; (c) Just break even ; (d) Any of these three are possible

Last Answer : (d) Any of these three are possible

Labour cost consists of (a) All people officially employed or unemployed (b) All people over the age of 18 but less than 58 years of age (c) All youth having passed matriculate examination ; (d) All the three

Description : Labour cost consists of (a) All people officially employed or unemployed (b) All people over the age of 18 but less than 58 years of age (c) All youth having passed matriculate examination ; (d) All the three

Last Answer : (a) All people officially employed or unemployed

Long-term equilibrium of an Industry under a perfectly market conditions in achieved when (a) All the firms are earning normal profit ; (b) All the firms are in equilibrium ; (c) There is no further entry or exit of firms from the industry ; (d) All the three

Description : Long-term equilibrium of an Industry under a perfectly market conditions in achieved when (a) All the firms are earning normal profit ; (b) All the firms are in equilibrium ; (c) There is no further entry or exit of firms from the industry ; (d) All the three

Last Answer :  (d) All the three

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

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.

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

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

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

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 ;

For a monopoly firm market demand curve is (a) Marginal revenue curve itself ; (b) Average Revenue curve itself ; (c) Marginal cost curve (d) None

Description : For a monopoly firm market demand curve is (a) Marginal revenue curve itself ; (b) Average Revenue curve itself ; (c) Marginal cost curve (d) None

Last Answer :  (b) Average Revenue curve itself ;

When the price is less than the average variable cost, the firm should …………. (a) Continue to operate till the market recover ; (b) Shut down its operation for the time being (c) Retrench workers and pay them compensation; (d) Clear the existing stock at a price less than the prevailing price to beat the competitors

Description : When the price is less than the average variable cost, the firm should . (a) Continue to operate till the market recover ; (b) Shut down its operation for the time being (c) Retrench ... compensation; (d) Clear the existing stock at a price less than the prevailing price to beat the competitors

Last Answer :  (b) Shut down its operation for the time being

If a firm shut down at a level when AVC > Price, the firm restricts its losses to (a) Total fixed cost ; (b) Average fixed cost ; (c) Variable cost ; (d) Average variable cost

Description : If a firm shut down at a level when AVC > Price, the firm restricts its losses to (a) Total fixed cost ; (b) Average fixed cost ; (c) Variable cost ; (d) Average variable cost

Last Answer : (a) Total fixed cost ;

A firm faces the shut down situation when (a) Price is less than average variable cost ; (b) Price is more than the average variable cost (c) Price is equal to fixed cost ; (d) Price is more than the average fixed cost

Description : A firm faces the shut down situation when (a) Price is less than average variable cost ; (b) Price is more than the average variable cost (c) Price is equal to fixed cost ; (d) Price is more than the average fixed cost 

Last Answer : (a) Price is less than average variable cost ; 

Capital employed is Rs.50,000 Trading Profit amounted Rs.12,200, Rs.15,000 and Rs.2000 loss for 2016, 2017 and 2018 respectively. Rate of interest is 8% and the rate of risk is 2% Remuneration from alternative employment of the proprietor is Rs.3,600 pa. Amount of Goodwill at 3 years. purchase of super Profit is A Rs.8,000 B Rs.8,800 C Rs.8,850 D Rs.9,500 ANS: Rs.8,850

Description : Capital employed is Rs.50,000 Trading Profit amounted Rs.12,200, Rs.15,000 and Rs.2000 loss for 2016, 2017 and 2018 respectively. Rate of interest is 8% and the rate of risk is 2% Remuneration from alternative employment of the ... A Rs.8,000 B Rs.8,800 C Rs.8,850 D Rs.9,500 ANS: Rs.8,850

Last Answer : A

A natural monopoly has declining – over large range of output (a) Long run average cost ; (b) Short run average cost ; (c) Long run total cost; (d) Long run marginal cost

Description : A natural monopoly has declining – over large range of output (a) Long run average cost ; (b) Short run average cost ; (c) Long run total cost; (d) Long run marginal cost

Last Answer : (a) Long run average cost ;

Long run supply curve of a constant cost industry is (a) Horizontal line at a price that is equal to the long run minimum average cost of production; (b) Horizontal line overlapping X axis ; (c) Vertical line at mid of X axis ; (d) Vertical line overlapping Y axis

Description : Long run supply curve of a constant cost industry is (a) Horizontal line at a price that is equal to the long run minimum average cost of production; (b) Horizontal line overlapping X axis ; (c) Vertical line at mid of X axis ; (d) Vertical line overlapping Y axis 

Last Answer : (a) Horizontal line at a price that is equal to the long run minimum average cost of production; 

In the short run which of the following is fixed (a) Labour ; (b) Capital ; (c) Raw material ; (d) None

Description : In the short run which of the following is fixed (a) Labour ; (b) Capital ; (c) Raw material ; (d) None

Last Answer : (b) Capital ;

…….. is the price at which demand for a commodity is equal to its supply (a) Normal price ; (b) Equilibrium price ; (c) Short run price ; (d) Secular price

Description : …….. is the price at which demand for a commodity is equal to its supply (a) Normal price ; (b) Equilibrium price ; (c) Short run price ; (d) Secular price

Last Answer : ; (b) Equilibrium price ;

Which of these is associated with a monopolistic competitive market – (a) Product differentiation ; (b) Homogeneous Product ; (c) Normal in short run; (d) Single buyer

Description : Which of these is associated with a monopolistic competitive market – (a) Product differentiation ; (b) Homogeneous Product ; (c) Normal in short run; (d) Single buyer

Last Answer : (c) Normal in short run;

In case of monopoly, a firm in the long run can have A.Loss B.Super Normal Profit C.Break even D.All of these

Description : In case of monopoly, a firm in the long run can have A.Loss B.Super Normal Profit C.Break even D.All of these

Last Answer : B.Super Normal Profit

Given competitive conditions, a firm in the long run earn (a) Quasi-rent (b) Pure-rent (c) Normal profit (d) Economic profit

Description : Given competitive conditions, a firm in the long run earn (a) Quasi-rent (b) Pure-rent (c) Normal profit (d) Economic profit

Last Answer : (c) Normal profit

Capital employed at the end of the year is Rs.4,20,000. Profit earned Rs.40.000. Average capital employed is A Rs.4,20,000 B Rs.4,00,000 C Rs.4,40,000 D Rs.4,60,000

Description : Capital employed at the end of the year is Rs.4,20,000. Profit earned Rs.40.000. Average capital employed is A Rs.4,20,000 B Rs.4,00,000 C Rs.4,40,000 D Rs.4,60,000

Last Answer : Rs 400000

…………….. may start a price war in order to grab a larger share of market (a) Oligopoly ; (b) Duopolies ; (c) Monopolist ; (d) Monopolistic competition

Description : …………….. may start a price war in order to grab a larger share of market (a) Oligopoly ; (b) Duopolies ; (c) Monopolist ; (d) Monopolistic competition

Last Answer : (a) Oligopoly

Henry takes the company's sales for the past five years and calculates a growth trend. Which sales forecasting method is being employed? A)time series analysis B)executive judgement C)correlation methods D)market tests

Description : Henry takes the company's sales for the past five years and calculates a growth trend. Which sales forecasting method is being employed? A)time series analysis B)executive judgement C)correlation methods D)market tests

Last Answer : A)time series analysis

Super normal profits occurs when (a) Average revenue is more than average cost ; (b) Total revenue is maximum; (c) Total cost is minimum ; (d) MC is equal to MR

Description : Super normal profits occurs when (a) Average revenue is more than average cost ; (b) Total revenue is maximum; (c) Total cost is minimum ; (d) MC is equal to MR 

Last Answer : (a) Average revenue is more than average cost ;

in case of perfect competition a firm is: A. Price taker B. Independent C. Free to fire prices D. None of these

Description : in case of perfect competition a firm is: A. Price taker B. Independent C. Free to fire prices D. None of these

Last Answer : ANSWER: A