classs 11forms of market

Under perfect competition the number of firms

A. Is large

B. Is about 10

C. Is limited

D. Are many but limited

• A

• B

• C

• D

When a firm’s average revenue are more than its average total cost its profit will be?

A. Supernormal profit

B. None of above

C. No profit

D. Normal profit

• A

• B

• C

• D

Perfectly competitive firm faces?

A. Zero

B. Perfectly inelastic demand curve

C. Negative

D. Perfectly elastic demand curve

• A

• B

• C

• D

Condition for producer equilibrium is:

A. TR=TVC

B. TC=TSC

C. MC=MR

D. MC should cut MR from below

E both c and d

• A

• B

• C

• D

• E

Before producer’s equilibrium when MR>MC, the firm earns only

A. Normal Profit

B. Abnormal profit

C. Normal loss

D. Abnormal loss

• A

• B

• C

• D

Which of the following is not an essential condition of pure competition:

A. Large number of buyers and sellers

B. Freedom of entry

C. Absence of transportation cost

D. Homogeneous product

• A

• B

• C

• D

Price taker firms

A. Do not advertise their products because it misleads the customers

B. Advertise their products to boost the level of demand

C. Do not advertise because they can sell as much as they wish at the prevailing price

D. Do not advertise but give gifts along with the sold items to attract customers

• A

• B

• C

• D

____________ is an ideal market?

A. Monopoly

B. Oligopoly

C. Perfect competition

D. Monopolistic

• A

• B

• C

• D

In perfect competition, since the firm is a price taker, the ________ curve is straight line

A. Marginal revenue

B. Total cost

C. Total revenue

D. Marginal cost

• A

• B

• C

• D

Which one of the following statement is incorrect?

A. Competitive firms are price takers and not price makers

B. Price discrimination is possible in monopoly only

C. Competitive firm always seeks to discriminate prices

D. Duopoly may lead to monopoly

• A

• B

• C

• D