Economics MCQs

Page No. 179

In the long run in perfect competition ?


aprice = average cost = marginal cost


bprice = average cost = total cost


cprice = marginal cost = total cost


dTotal revenue = Total variable cost



In perfect competition ?


aA few firms dominate the industry


bFirms are price makers


cThere are many buyers but few sellers


dThere are many buyers and sellers



A competitive firm produces a level of output at which ?


aPrice is greater than marginal cost


bprice equals marginal cost


cprice is less than marginal cost


dNone of the above



A competitive firm demand curve is ?


aHorizontal


bvertical


cdownward sloping


delastic


View Answer Horizontal

For perfect competition to work there must be ?


a many buyers and sellers


ba standard product


c free entry and exit


dall of the above


View Answer all of the above

In a competitive industry each buyer and seller ?


ais a price taker


bProducer different products


c Believes that can influence price


dPrevents the entry of competitors


View Answer is a price taker

Holding all factors constant except one and increasing a variable factor is expected to lead to steadily decreased marginal product of that factor, this is an example of ?


adecreasing returns to scale


bThe law of diminishing returns


cconstant returns to scale


d an inefficient production technique



The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve ?


aAt their lowest points


bWhen they are declining


cWhen they are increasing


dWhen marginal revenue is zero



The firms long run output decision will be where ?


along run average cost is lowest


bmarginal revenue equals output


cmarginal revenue equals long run marginal cost


dmarginal cost equals output



If a firm is not operating at the output necessary to achieve all scale economies, it has not achieved its ?


aEfficient scale


bAverage efficient scale


cMaximum efficient scale


dMinimum efficient scale



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