Equilibrium of firm Perfect Competition and Monopoly Test 01 Preparation Online

1. Under perfect competition:

A. AR = MR

B. AC = AVC

C. AR = MC

D. AR = AC

2. In monopoly and perfect competition the cost curves are:

A. Same

B. Different

C. Opposite

D. None of these

3. If a firm shuts down temporarily, it will incur loss equal to:

A. TVC

B. AFC

C. AVC

D. TFC

4. A firm decides to exit the industry when:

A. AC starts rising

B. MC starts rising

C. Price is less than LAC

D. TC starts rising

5. Profit is maximum when:

A. TC and TR curves are parallel

B. MC and MR curves are parallel

C. TC and TR curves cross each other

D. AC and AR curves cross each other

6. When a competitive firm achieves long run equilibrium then:

A. P = MC

B. P = ATC

C. All of the above

D. MR = MC

7. The necessary condition for equilibrium position of a firm is:

A. MC = MR

B. MC > Price

C. MC = AC

D. MR = MC

8. The most efficient scale of production of a firm is where:

A. SAC is minimum

B. LAC is minimum

C. LMC is minimum

D. SMC is minimum

9. Normal profit is called normal because:

A. It is minimum acceptable to the producer

B. It is minimum which buyer wants to pay

C. It is the maximum allowed by govt.

D. It is neither very high nor very low

10. A firm should shut down in the short run if it is not covering its:

A. Variable cost

B. Total cost

C. Fixed cost

D. Explicit cost (money outlays)

Equilibrium of firm Perfect Competition and Monopoly Test 01 Preparation Online

Leave a Reply Cancel reply