Economics MCQs

Page No. 179

In the long run in perfect competition ?


aprice = average cost = marginal cost

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bprice = average cost = total cost

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cprice = marginal cost = total cost

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dTotal revenue = Total variable cost

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In perfect competition ?


aA few firms dominate the industry

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bFirms are price makers

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cThere are many buyers but few sellers

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dThere are many buyers and sellers

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A competitive firm produces a level of output at which ?


aPrice is greater than marginal cost

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bprice equals marginal cost

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cprice is less than marginal cost

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dNone of the above

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A competitive firm demand curve is ?


aHorizontal

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bvertical

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cdownward sloping

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delastic

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View Answer Horizontal

For perfect competition to work there must be ?


a many buyers and sellers

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ba standard product

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c free entry and exit

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dall of the above

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View Answer all of the above

In a competitive industry each buyer and seller ?


ais a price taker

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bProducer different products

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c Believes that can influence price

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dPrevents the entry of competitors

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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

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bThe law of diminishing returns

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cconstant returns to scale

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d an inefficient production technique

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


aAt their lowest points

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bWhen they are declining

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cWhen they are increasing

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dWhen marginal revenue is zero

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The firms long run output decision will be where ?


along run average cost is lowest

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bmarginal revenue equals output

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cmarginal revenue equals long run marginal cost

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dmarginal cost equals output

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


aEfficient scale

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bAverage efficient scale

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cMaximum efficient scale

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dMinimum efficient scale

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