Profit Maximization Test 01 Mcqs Preparation Online

1. At the point of equilibrium of firm (under perfect competition):

A. None of these

B. MR curve must be rising

C. MC curve must be rising

D. MC curve must be falling

2. Profit is maximum when:

A. Distance between MR and MC is maximum

B. Distance between TR and TC is maximum

C. None of these

D. Distance between AR and AC is maximum

3. Profit is maximum when:

A. Slope of TC and TR is the same

B. None of these

C. Slope of MC and MR is the same

D. Slope of AC and AR is the same

4. A firm's MR exceeds its MC, maximum profit rule requires that firm to:

A. Increase in perfect competition but not necessarily in imperfect competition

B. Increase in output in imperfect but not necessarily in perfect competition

C. Increase in output in both perfect and imperfect competition

D. Decrease in output in both perfect and imperfect competition

5. Normal profit is:

A. Part of economic profit

B. Total revenue minus implicit cost

C. Total revenue minus total cost

D. Part of total cost

6. The basic goal of a firm is to:

A. Maximize profit

B. Maximize revenues

C. Maximize welfare of its employees

D. Maximize output

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

A. MC > Price

B. MC > MR

C. MC = MR

D. MC = AC

8. A firm earns economic profit when total profit exceeds:

A. Explicit costs

B. Variable costs

C. Implicit costs

D. Normal profit

9. Profit is maximum when:

A. MC and MR curves are parallel

B. None of these

C. AC and AR curves are parallel

D. TC and TR curves are parallel

10. Economic profit is:

A. Total revenue minus explicit cost

B. Total revenue minus total cost

C. Total variable cost minus total fixed cost

D. Part of total cost

Profit Maximization Test 01 Mcqs Preparation Online

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