Question # 1

If a monopolist wants to increase the sale of its product, it will have to --------- the price of its good

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Decrease

Increase

Keep constant

None of the three

When average product increases, marginal product is:

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Also increases

Decreases

Zero

Negative

Industry is in equilibrium under perfect competition in the long run, when every existing firm in the industry

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Is earning abnormal profit

Is earning normal profit

Is facing minimum loss

Is facing abnormal loss

Tendency of average revenue curve under monopoly is alwaus

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Falls down

Parallel to x-axis

Rises up

Parallel to y-axis

When total revenue and total cost of a firm are equal, the firm earns

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Abnormal profit

Normal profit

Normal loss

Abnormal loss

A monopolistic firm has control of

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Whole market supply by one firm

Whole market supply by two firms

Whole market supply by a few firms

None of these

Till marginal cost curve remains below the marginal revenue curve, from the economic point of view, increase in production for a firm is

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Beneficial

Unbeneficial

May be beneficial or unbeneficial

Neither beneficial nor unbeneficial

Under monopoly, marginal revenue is _____ of output

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Decreasing function

Increasing function

Quadratic function

Cubic function

Firm earns abnormal profit, when

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AC=AR

AR>AC

AR<AC

AC=MC

Speed of increase in total revenue remains equal with the increase in output

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Under monopoly

Under oligopoly

Under perfect competition

Under pure competition

Shut down point appears, when

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AVC=AR

AVC>AR

AVC<AR

AC=AR

The formula of calculating total revenue is

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P x Q

P x AC

AC x Q

TC / Q

When average product is maximum, marginal product is:

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Positive

Equal to AP

Zero

Negative

A monopolist firm usually earns

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Normal profit

Abnormal profit

Minimum loss

Abnormal loss

Under perfect competition in the long run a firm

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Always earns abnormal profit

Always earns normal profit

Usually earns abnormal profit

Usually faces loss

If the most part of total supply of commodity is produced by one firm, it is called

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Oligopoly

Monopoly

Perfect competition

Monopolistic competition

If the equation is this, MC=MR-AR(P)=AC, then the firm

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Earns normal profit

Earns abnormal profit

Bears minimum loss

Bears abnormal loss

If the equation is this, MC=MR=AR(P)<AC then the firm

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Earns normal profit

Earns abnormal profit

Bears loss

Bears abnormal loss

Under monopoly, in the long run a firm

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Earns normal profit

Earns abnormal profit

Bears minimum loss

Bears abnormal loss

Monopolist firm in the long run

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Always faces loss

Usually faces loss

Usually earns normal profit

Always earns abnormal profit

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