Tag: economics

Questions Related to economics

The supply curve for the monopolist __________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. does not exist

  2. is represented by the marginal cost curve above the average total cost curve

  3. is represented by the marginal cost curve above the average variable cost curve

  4. none of the above

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Correct Option: A

Marginal revenue for a monopolist is equal to ________________________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. the increased revenue from the sale of an additional unit less the loss the revenue from selling previous unit at a lower price

  2. the change in revenue resulting from a one unit change in output

  3. the change in revenue divided by the change in output

  4. all of the above

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Correct Option: D

In imperfect competition, the average revenue and marginal revenue curves are ________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. different

  2. same

  3. identical

  4. perpendicular

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Correct Option: A

Which of the following is true regarding monopolistic competition?

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. $AR=MR$

  2. $MR=0$

  3. $AR< MR$

  4. $AR>MR$

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Correct Option: D

When AR is falling, MR will be ___________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. equal to AR

  2. less than AR

  3. more than AR

  4. either more or equal to AR

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Correct Option: B

Under monopoly, MR can be negative only when:

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. AR is increasing

  2. AR is decreasing

  3. AR is constant

  4. AR is zero

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Correct Option: B

The strength of a monopolist may be assessed by ____________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. the size of his total revenue

  2. the gap between AR and MR

  3. the size of consumer's surplus accruing to him

  4. the long-term price of his product

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Correct Option: B

If AR curve is falling straight line, MR curve will lie below it in such a way that any line drawn from a point from y-axis parallel to x-axis to meet the AR curve is intersected by the MR curve _________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. mid-way

  2. more than half-way

  3. less than half-way

  4. any where

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Correct Option: A

In the case of consumer's demand curve determines the price, but in the case of producer ___________.
(i) AR curve determines the price
(ii) AR curve determines the price and income
(iii) MR curve determines  the price
(iv) MR curve and AR curve are determines the price

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. 1 only

  2. 2 only

  3. 3 only

  4. 4 only

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Correct Option: A

The marginal revenue of the monopolist is ____________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. Larger than price

  2. Equal to price

  3. Smaller than price

  4. Any of the above is possible

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Correct Option: C
Explanation:

In a monopoly, the marginal revenue is lower than the price because the demand curve is downward sloping. When prices go down, more units of the product are bought. Because of this, marginal revenue will not always equal price.