#### CA Foundation Business Economics Study Material Chapter 4 Price Determination in Different Markets – MCQs

MULTIPLE CHOICE QUESTIONS

1. In economics the term market refers to –
(i) a particular place
(ii) a commodity
(iv) bargaining for a price
(a) only i
(b) only ii
(c) ii & iii
(d) ii, iii and iv

2. Price depends on –
(a) utility and scarcity
(b) Cost of production
(c) transferability
(d) all the above

3. The basic behavioural principle which apply to all market conditions –
(a) A firm should produce only if its TR $$\ge$$ TVC
(b) A firm should produce at a level where its MC = MR
(c) MC curve cuts the MR curve from below.
(d) All the above

4. Total revenue can be found out by –

5. When marginal revenue is zero, total revenue will be –
(a) lowest
(b) highest
(c) negative
(d) zero

6. If MR < 0, then the TR will be –
(a) rising
(b) highest
(c) falling
(d) zero

7. The change in the total revenue that results from a one unit change in sales is –
(a) Total Revenue
(b) Average Revenue
(c) Marginal Revenue
(d) both c and d

8. The revenue per unit of called as – one commodity sold is
(a) Total Revenue
(b) Marginal Revenue
(c) Average Revenue
(d) None of the above

9. AR can be found out by the formula –

10. Which of the following is not correct –

11. Which concept of revenue is called price?
(a) TR
(b) AR
(c) MR
(d) None of these

12. If a producer sells 4 units of a good at ₹ 10 per unit and 5 units at ₹ 8 per unit, marginal revenue would be –
(a) 0
(b) 1
(c) 2
(d) 3

13.

(i) Total Revenue
(ii) Marginal Revenue
(iii) Average Revenue
(iv) Price
(a) i & iii
(b) ii & iv
(c) ii & iii
(d) iii & iv

14. Which of the following statement is incorrect –
(a) Demand and supply determine price of a commodity
(b) At equilibrium price quantity demanded equals quantity supplied.
(c) Demand factor influences price more.
(d) Equilibrium price can change.

Use the following figure to answer questions 15-16

15. In the figure above at the equilibrium point E –
(a) demand is more than supply
(b) supply is more than demand
(c) demand and supply are equal
(d) none of the above

16. In the above figure equilibrium point, quantity and price are –
(a) E , OQ , OP
(b) E , ES , EP
(c) ES , ED, OQ
(d) E , EP , ED

17. When demand and supply increase equally, then –
(a) both equilibrium price and equilibrium quantity remain unchanged.
(b) both equilibrium price and equilibrium quantity increase
(c) equilibrium price remains unchanged but equilibrium quantity increases
(d) equilibrium price changes but equilibrium quantity remains unchanged.

18. If increase in demand is more than increase in supply, then –
(a) equilibrium price will fall but equilibrium quantity will increase
(b) equilibrium price will increase but equilibrium quantity will decrease
(c) both equilibrium price and equilibrium quantity will increase
(d) both equilibrium price and equilibrium quantity will decrease

19. When demand increases equilibrium price will increase only if –
(a) supply also increases
(b) supply also decreases
(c) supply remains same
(d) if the elasticity remains the same

20. The equilibrium price remains constant only if demand and supply
(a) increase unequally
(b) decrease unequally
(c) increase equally
(d) none of the above

21. The price will decrease if demand remains same and –
(a) supply increases
(b) supply decreases
(c) supply is more than the previous level
(d) none of these

22. In the short period equilibrium price is –
(i) higher than long run price
(ii) higher than market price
(iii) lower than market price
(iv) lower than long run price
(a) i & ii
(b) ii & iii
(c) iii & iv
(d) i & iii

23. The inter-action of market demand and supply curves determines the –
(a) equilibrium price
(b) reserve price
(c) both a & b
(d) none of these

24. Uniform price for homogeneous product at any one time is the essential condition of –
(a) monopolistic competition
(b) oligopoly
(c) perfect competition
(d) duopoly

25. For maximizing profit, the condition is –
(a) AR = AC
(b) MR = AR
(c) MR = MC
(d) MC = AC

26. MC = MR = AR means equilibrium position of a firm –
(a) in the long period
(b) in the short period under imperfect com-petition
(c) in the short period under perfect competition
(d) under perfect competition.

27. Under perfect competition –
(a) MC = Price
(b) MC > Price
(c) MC < Price
(d) none of these

28. All but one are correct about perfect competition –
(a) Large number of buyers and sellers
(b) Homogeneous product
(c) Differentiated product
(d) Uniform price

29. An increase in demand for a commodity causes –
(a) an increase in equilibrium price
(b) an increase in equilibrium quantity
(c) both a & b
(d) none of these

30. Which of the following is/are the features of perfect competition ?
(i) Large number of buyers and sellers
(ii) Identical product
(iii) Free entry and exit
(iv) No transportation cost
(a) i, ii and iii
(b) ii, iii and iv
(c) i, ii, and iv
(d) i, ii, iii and iv

31. The demand curve of a commodity faced by a competitive firm is –
(a) very elastic
(b) perfectly inelastic
(c) very inelastic
(d) perfectly elastic

32. In the short period, a perfectly competitive firm earns –
(a) normal profit
(b) super normal profit
(c) can incur losses
(d) all the above

The questions 33 to 35 are based on the above diagram

33. Figure (A) shows the equilibrium position –
(a) of an industry
(b) of a firm
(c) of a perfectly competitive industry
(d) of a perfectly competitive firm

34. Figure (B) shows the equilibrium –
(a) of a firm
(b) of a long run perfectly competitive firm
(c) of a short run competitive firm
(d) none of these

35. In figure (B) L, M and N represents –
(a) SMC, SAC and STC
(b) LMC, SAC and AR = AC
(c) SMC, LAC and AR = AC
(d) LMC, LAC and AR = MR

36. The following figure shows that –

(a) a firm is a price maker
(b) a firm is price taker
(c) an industry is price taker
(d) none of these

37. The figure above shows that the firm belong to –
(a) Imperfect competitive market
(b) monopoly
(c) oligopoly
(d) Perfectly competitive market

38. The firm’s short run supply curve is its marginal cost curve above its average variable cost curve is correct about –
(a) perfect competition
(b) oligopoly
(c) monopoly
(d) duopoly

39. Under perfect competition the price of commodity
(a) can be controlled by a firm
(b) cannot be controlled by a firm
(c) controlled up to some extent by a firm
(d) none of the above

40. AR and MR curve coincide in –
(a) Monopoly
(b) Monopolistic Competition
(c) Perfect Competition
(d) Oligopoly

41. Consider the following figure-

(a) super normal profit
(b) normal profit
(c) loss
(d) shut down point

42. Perfectly elastic demand curve implies that –
(a) the firm has no control over price
(b) the firm can sell any quantity at the ruling price
(c) the firm is price taker and output adjuster at ruling price
(d) all a, b and c.

43. Under perfect competition, if the AR curve lies below the AC curve, the firm would –
(a) make only normal profit
(b) incur losses
(c) make super normal profit
(d) firm cannot determine profit

44. Short run supply curve of a perfectly competitive firm is represented by –
(a) short run MC curve
(b) short run AC curve
(c) the part of the MC curve that lies above AVC
(d) none of these

45. Firms are of optimum size in the long period in case of –
(a) Monopoly
(b) Perfect competition
(c) Monopolistic competition
(d) All the above

46. The condition of the long run equilibrium for a competitive firm is –
(a) MC = MR = AR
(b) MC = AC = AR
(c) MC = MR = AC
(d) MC = MR = AR = AC

47. In the long run, firms only earn normal profits is a feature of –
(a) perfect competition
(b) monopoly
(c) both a & b
(d) none of these

48. Odd one out of the following :
(a) Firms are of optimum size and earn normal s profits only in long run.
(b) Firms sell identical product at uniform price
(c) Firms are not of optimum size and earn super normal profits in long run.
(d) Firms are free to move in or out of the industry.

49. The industry’s demand curve and the average revenue curve are same in case of –
(a) perfect competition
(b) monopoly
(c) oligopoly
(d) none of the above

50. All the characteristics of monopolistic competition except –
(a) Large number of buyers and sellers
(b) Freedom of entry and exit
(c) Excess production capacity in long run
(d) Full control over price of commodity

51. There is no difference between firm and industry in case of –
(a) pure monopoly
(b) pure oligopoly
(c) duopoly
(d) perfect competition

52. Find the odd out –
(a) Monopoly may be the result of control over raw materials
(b) Monopoly may be the result of business combines
(c) Monopoly may be the result of patents, copyrights, etc.
(d) Monopoly may be the result of control over demand of commodity

53. The demand curve of consumers for product produced by firm is indicated by –
(a) the average cost curve of a firm
(b) the marginal cost curve of a firm
(c) the average revenue curve of a firm
(d) the average revenue curve of an industry.

54. If in the long run super normal profits can be made by a firm, it means the firm belongs to
(a) perfect competition market
(b) monopolistic competition market
(c) monopoly market
(d) oligopoly market

55. If e >1 on average revenue curve –
(a) MR is positive and TR is rising
(b) MR is negative and TR is falling
(c) MR is zero and TR is maximum
(d) none of these

56. When MR is zero the elasticity of demand on AR curve is –
(a) e < 1 and TR is maximum
(b) e = 1 and TR is maximum
(c) e > 1 and TR is rising
(d) none of these

57. Entry to the market for new firms is blocked in –
(a) perfect competition
(b) monopoly
(c) oligopoly
(d) monopolistic competition

58. When the firm charges different prices to different customers for the same commodity, it is engaged in –
(a) price determination
(b) price rigidity
(c) price discrimination
(d) none of these

59. Lux Supreme, Rexona, Dove Soap, Pears Soap, Liril Soap, etc. indicates –
(a) perfectly competitive market
(b) monopoly market
(c) monopolistic competitive market
(d) duopoly market

60. If price and marginal revenue are same then the demand curve must be –
(a) perfectly inelastic and vertical
(b) highly elastic and downward sloping
(c) perfectly elastic and horizontal
(d) highly inelastic and downward sloping

61. Perfectly elastic demand curve signifies that –
(a) the firm has no control over price of commodity
(b) the firm has to sell any amount of commodity at prevailing price
(c) the firms average revenue and marginal revenue coincide
(d) all the above

62. If under perfect competition, the demand curve lies above the average cost curve, the firm would –
(a) make normal profits
(b) incur losses
(c) make super normal profits
(d) profit is indeterminate

63. If a monopoly firm is charging price ₹ 20 per unit and elasticity of demand is 5, then, MR will be –
(a) ₹ 10
(b) ₹ 12
(c) ₹ 14
(d) ₹ 16

64. Monopoly price is the function of –
(a) MC of production
(b) price elasticity of demand
(c) neither (a) nor (b)
(d) both (a) and (b)

65. Railways is an example of –
(a) perfect competition
(b) monopoly
(c) oligopoly
(d) monopolistic competition

66. Highly elastic negatively sloped demand curve is related to –
(a) monopoly
(b) monopolistic competition
(c) perfect competition
(d) both (a) and (b)

67. The cross elasticity of demand for monopolist’s product is –
(a) zero
(b) less than zero
(c) infinite
(d) unity

68. A market situation in which there are only few firms producing differentiated product which are close substitutes is –
(a) monopolistic competition
(b) oligopoly
(c) duopoly
(d) perfect competition

69. The cross elasticity of demand for the product of a firm under perfect competition is –
(a) zero
(b) less than zero
(c) infinite
(d) unity

70. Demand curve of a firm is indeterminate in case of –
(a) monopoly
(b) oligopoly
(c) duopoly
(d) none of these

71. Under monopolistic competition the cross elasticity of demand for the product of a single firm is –
(a) infinite
(b) highly elastic
(c) highly inelastic
(d) zero

72. At every level of output AR = MR in case of –
(a) perfect competition
(b) monopoly
(c) oligopoly
(d) all the above

73. Kinked demand curve is related to –
(a) monopoly
(b) pure competition
(c) oligopoly
(d) none of these

74. A single movie theatre in a small town or city means –
(a) perfect competition
(b) monopoly
(c) monopolistic competition
(d) both (a) and (b)

75. According to kinked demand curve theory, the upper segment of the demand curve is –
(a) highly elastic
(b) highly inelastic
(c) unitary elastic
(d) perfectly inelastic

76. A firm under perfectly competitive market wants to double its sales. The firm would –
(a) lower the price of commodity
(b) improve the quality of commodity
(c) offer double the quantity for sale at ruling price

77. For maximization of profits, MR = MC is the first order condition –
(a) only under monopoly
(b) only under perfect competition
(c) both under monopoly as well as perfect competition
(d) in any type of market

78. Which of the following statements are correct with regard to firm’s equilibrium –
(i) MR = MC
(ii) MC curve cuts the MR curve from below
(iii) TR = TC
(iv) MR = AR
(a) i & ii
(b) ii & iii
(c) iii & iv
(d) none of these

79. A firm under monopolistic competition is in long run equilibrium –
(a) at the minimum point of the long run AC curve
(b) at the falling segment of the long run AC curve
(c) at the rising segment of the long run AC curve
(d) when Price = MC

80. The AR curve is tangent to the minimum point of AC curve in the long run, if there is –
(a) perfect competition
(b) oligopoly
(c) monopoly
(d) monopolistic competition

81. In the long run, one firm operates at the optimum level while other operates at sub-optimum level. Such firms belong to –
(a) monopoly and perfect competition
(b) perfect competition and monopolistic competition
(c) monopolistic competition and oligopoly
(d) oligopoly and monopoly

82. Which one of the following gives the correct relationship between MR, AR and price elasticity

83. Marginal revenue will be negative if elasticity of demand is –
(a) equal to zero
(b) less than zero
(c) greater than one
(d) less than one

84. The phenomena of excess production capacity is associated with –
(a) Perfect competition
(b) Monopolistic competition
(c) Monopoly
(d) Oligopoly

85.

The AR and MR for 6 units would be –
(a) 55 and 30 respectively
(b) 30 and 55 respectively
(c) 60 and 30 respectively
(d) 30 and 60 respectively

Use the following data to answer Qs. 86 – 87

86. The total revenue of the of 2 units would be –
(a) ₹ 10
(b) ₹ 16
(c) ₹ 18
(d) can not be determined

87. The marginal revenue of 3rd unit would be –
(a) ₹ 10
(b) ₹ 6
(c) ₹ 4
(d) ₹ 2

88. Suppose the price of a commodity determined in a competitive market is ₹ 5, then the marginal revenue of the 4th unit sold would be –
(a) ₹ 20
(b) ₹ 15
(c) ₹ 10
(d) ₹ 5

89. A monopoly firm faces a downward sloping demand curve because –
(a) it has an inelastic demand
(b) it sells large quantities to few buyers
(c) it is same as the industry
(d) consumers prefer its product

90. At the quantity where MR equals MC, the AFC is ₹ 7; AVC is ₹ 23 and the price is ₹ 30, hence, the firm –
(a) should continue production in short run
(b) should continue production in long run
(c) should shut down
(d) none of these

91. A firm has to take decision whether to produce 15th unit of output but finds its marginal cost of 15th unit to be ₹ 25 and marginal revenue of 15th unit to be ₹ 18 hence firm –
(a) should produce 15th unit
(b) should cut down its output level
(c) should further expand production beyond 15th unit
(d) can not determine output level

Use the following data for Qs. 92-94
A perfectly competitive firm has the following cost schedule

92. if the market price is ₹ 13, to maximize profits the firm should produce –
(a) 8 units
(b) 7 units
(c) 6 units
(d) 9 units

93. At the market price of ? would be – 6, the maximum profits
(a) ₹ 5
(b) ₹ 10
(c) ₹ 15
(d) ₹ (-) 24

94. Suppose the price falls choose to produce – to ₹ 7, the firm would
(a) 5 units
(b) 6 units
(c) 7 units
(d) 8 units

95. A competitive firms MC curve and AVC curve are given to, show which region of the curves show the firm’s supply curve in the short run.

(a) region HE
(b) region EG
(c) region EF
(d) region IE

96. A firm making zero economic profit –
(a) earns super normal profits
(b) incur losses
(c) earns a normal profits
(d) profit or loss is indeterminate

97. If average variable cost exceeds the market price, the firm should produce –
(a) zero output with fixed costs
(b) zero output without fixed cost
(c) less output without fixed costs
(d) zero output with or without fixed cost

98. An individual firm is only output adjuster at ruling market price in –
(a) monopoly
(b) oligopoly
(c) perfect competition
(d) monopolistic competition .

99. There are few firms selling homogeneous or differentiated products in –
(a) Perfect competition
(b) Oligopoly
(c) Monopolistic competition
(d) None of these

100. Kinked demand curve shows-
(a) Fall in price
(b) rise in price
(c) Stability in price
(d) both (a) and (b)

101. In the above figure, the demand curves facing a seller under perfect competition, monopolistic ‘ competition and Monopoly are-
(a) AR2 ; AR1, AR
(b) AR1, AR2, AR
(c) AR, AR2, AR1
(d) AR, AR1, AR2

102. The demand curve is undefined under _____ market structure.
(a) oligopoly
(b) monopoly
(c) perfect competition
(d) monopolistic competition

103. When demand is elastic, MR is _____
(a) negative
(b) positive
(c) zero
(d) one

104. The market that induces formation of cartels is _____
(a) Perfect Competition
(b) Monopoly
(c) Oligopoly
(d) None of these

105. Match the following ;

(a) A-2 ; B-3 ; C-1 ; D-4
(b) A-4 ; B-1 ; C-2 ; D-3
(c) A-1 ; B-2 ; C-3 ; D-4
(d) A-2 ; B-1 ; C-4 ; D-3

106. A bilateral monopoly is one which-
(a) there are two products with one producer
(b) there are international monopoly agree-ments
(c) monopoly is shared between the people
(d) a monopolist is facing a monopsonist

107. The characteristic of monopolistic competition which is compatible with monopoly is-
(a) One seller and large number of buyers
(b) Full control over price
(c) Freedom of entry and exit
(d) Demand Curve slopes downward

108. If the demand curve of a firm is a horizontal straight line-
(a) a firm can sell any quantity at prevailing price
(b) a firm can sell only specific quantity at prevailing price
(c) all firms can sell equal amount of a com-modity
(d) firms can differentiate their products

109. When demand curve is inelastic ; MR is-
(a) negative
(b) positive
(c) zero
(d) one

110. A rational producer will always operate on the _____ portion of the demand curve
(a) elastic
(b) inelastic
(c) unitary elastic
(d) perfectly inelastic

111. Firms have chronic excess production capacity in _____ market
(a) duopoly
(b) perfect competition
(c) monopolistic competition
(d) oligopoly

112. The theory of monopolistic competition is developed by-
(a) H.E. Chamberlin
(b) Mrs.JoanRobinson
(c) Dr. Marshall
(d) Nicholoas Kaldor

113. The point where P = AC is called –
(a) profit earning point
(b) loss making point
(c) breakeven point
(d) shut down point

114. TR is a straight positively sloping line from origin is under-
(a) perfect competition
(b) monopoly
(c) duopoly
(d) oligopoly

115. If a monopolist resorts to price discrimination, price will be higher in the market where demand is-
(a) unitary elastic
(b) elastic
(c) inelastic
(d) none of these

116. Under collusive oligopoly, price is often decided by-
(a) the industry
(b) the firm
(d) none of these

117.

In the figure above, If OP is price, then ACO represents-

(a) TC
(b) TR
(c) TR at OP price
(d) TR at OY price

118. Slope of firm’s demand curve = ∞ under perfect competition means demand curve is_____
(a) horizontal
(b) vertical
(c) positive
(d) negative

119. Price exceeds MC under monopoly, but not under perfect competition because-
(a) in perfect competition AR = MR
(b) in perfect competition AR = MC
(c) in monopoly AR > MR
(d) all the above

120. In the long run, a monopolist produces _____ level of output and charge a _____ price than a firm under perfect competition market
(a) lower ; higher
(b) lower; lower
(c) higher ; lower
(d) higher ; higher

121. TR minus total explicit cost is called
(a) profit
(b) economic profit
(c) supernormal profit
(d) accounting profit

122. Under perfect competition when price line (AR) passes through minimum point of AVC curve is called _____
(a) minimum losses point
(b) shut down point
(c) breakeven point
(d) profit point

123. At the shut down point, losses of a firm under perfect competition are equal to-
(a) AVC
(b) TFC
(c) AC
(d) MC

124. In the long run under monopolistic competition, profit maximizing profit is _____
(a) less than least cost output
(b) more than least cost output
(c) equal to least cost output
(d) none of the above

125. “Purchase only made-in-India jadi-booti toothpaste” will impact the different of market more towards
(a) monopoly
(b) duopoly
(c) oligopoly
(d) none of the above

126. A monopolist can determine –
(a) price
(b) output
(c) either price or output
(d) both price and output

127. A monopolistic firm has a position of ATC = price in the _____
(a) short run equilibrium
(b) very short run equilibrium
(c) long run equilibrium
(d) any period of time

128. In perfect competition, in the long run, if new firms enter the industry the supply curve shifts to the right resulting in ______
(a) fall in price
(b) rise in price
(c) no change in price
(d) none of the above

129. The difference between least cost output and profit maximizing output is called _____
(a) reserve capacity
(b) excess capacity
(c) normal capacity
(d) abnormal capacity

130. The kink occurs at-
(a) any price
(b) prevailing price
(c) any quantity
(d) to be determined price

131. Doctors, lawyers, consultants, services like power supply, telecommunication fees to different patients/clients. This is a ______ price discrimination.
(a) first degree
(b) second degree
(c) third degree
(d) both second and third degree

132. Charging different prices by monopolist to customers in geographically separate market is a degree of price discrimination.
(a) first
(b) second
(c) third
(d) price discrimination is not possible in separate markets

133. Monopolist charging a price that takes away the entire consumer surplus is a case of _____ degree of price discrimination.
(a) first
(b) second
(c) third
(d) none of the above

134. Which of the following statements refer to Trice leadership?
(a) Existence of perfect competition
(b) A form of price collusion
(c) Stiff competition
(d) The maintenance of a monopolistic price

135. How many sellers usually exist in an oligopoly market?
(a) A large number of sellers
(b) One seller
(c) Few sellers
(d) Two sellers

136. Which of the following is not correct?
(a) if e > 1, MR is +ve
(b) if e < 1, MR is – ve
(c) if e = 1, MR = 0
(d) if e = 0, MR = 0

137. Long-run supply curve in the constant cost industry-
(a) slopes downward to the right
(b) slopes upward to the right
(c) is horizontal straight line
(d) none of the above

138. The concept of group equilibrium is related to-
(a) Paul Sweezy
(b) Chamberlin’s monopolistic competition
(c) Perfect competition
(d) none of the above

139. Dumping is an example of price discrimination which is _____ price discrimination
(a) of first degree
(b) of second degree
(c) of third degree
(d) international

140. _____ is the market structure where there is a single buyer.
(a) Monopsony
(b) Monopoly
(c) Oligopsony
(d) Duopoly

141. At all the level of output AR = MR in _____
(a) a perfect competition market
(b) a monopoly market
(c) a oligopoly market
(d) all the above

142. The long run supply curve of an increasing cost industry
(a) slopes downwards towards right
(b) slopes down towards left
(c) slopes up towards right
(d) none of these

143. The long run supply curve sloping down towards right belongs to _____ industry
(a) increasing cost
(b) decreasing cost
(c) constant cost
(d) none of these

144. Under perfect competition, the MC curve at equilibrium will be-
(a) constant
(b) rising
(c) falling
(d) none of these

145. Market price is the price that prevails in a _____
(a) very short period market
(b) short period market
(c) long period market
(d) secular period market

146. The market in which normal price prevails is a _____ market.
(a) Market period
(b) short period
(c) long period
(d) secular period

(a) Monopoly
(b) Monopolistic Competition
(c) Oligopoly
(d) Perfect Competition

148. Which of the following is not a characteristics of a “price taker”?.
(a) TR = P X Q
(b) AR = Price
(c) Negatively sloped demand curve
(d) Marginal Revenue = Price

149. In monopolistic competition, a firm is in long run equilibrium _____
(a) at the lowest point of the LAC curve
(b) at the falling part of the LAC curve
(c) at the rising part of the LAC curve
(d) when, price = MC

150. The sale of branded goods is common situation is case of _____
(a) perfect competition
(b) monopolistic competition
(c) monopoly
(d) pure competition

151. Which market explains that Marginal Cost is equal to price for attaining equilibrium.
(a) Perfect Competition
(b) Monopoly
(c) Oligopoly
(d) Monopolistic Competition

152. When AR = ₹ 10 and AC = ₹ 8 the firm makes
(a) Normal Profit
(b) Net Profit
(c) Gross Profit
(d) Supernormal Profit

153. A firm’s AVC curve is rising, its MC curve must be ______
(a) constant
(b) above the TC curve
(c) above the AVC curve
(d) all the above

154. When a market is in equilibrium or has cleared it means _____
(a) No shortages exist
(b) Quantity demanded equals quantity sup-plied
(c) A price is established that clears the market
(d) All the above

155. If a competitive firm doubles its output, its total revenue-
(a) doubles
(b) more than doubles
(c) less than doubles
(d) none of these

156. Which is the first order condition for the profit of a firm to be maximum?
(a) AC = MR
(b) MC = MR
(c) MR = AR
(d) AC = AR

157. Full capacity is utilized only when there is
(a) Monopoly
(b) Perfect Competition
(c) Price Discrimination
(d) Oligopoly

158. The upper portion of the kinked demand curve is relatively-
(a) More elastic
(b) More inelastic
(c) Less elastic
(d) Inelastic

159. In the very short run period, the price of the commodity is influenced most by-
(a) demand
(b) supply
(c) cost
(d) production

160. Long run normal prices is that which is likely to prevail-
(a) all the times
(b) in market period
(c) in short-run period
(d) in long-run period

161. The degree of monopoly power is measured in terms of difference between-
(a) Marginal Cost and the price
(b) Average Cost and Average Revenue
(c) Marginal Cost and Average Cost
(d) Marginal Revenue and Average Cost