Theory Of Firm Under Perfect Competition CBSE Questions & Answers

Theory Of Firm Under Perfect Competition

This is Economics Class 12 Theory of Firm Under Perfect Competition CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
Is AR = price
  • A
    Can’t say
  • B
    None of these
  • C
    No
    Correct
  • D
    Yes
2
AR is nothing but demand curve.
  • A
    None of these
  • B
    Yes
    Correct
  • C
    Can’t say
  • D
    No
3
The relationship between AR and MR when price is constant is
  • A
    The values decrease
  • B
    AR\( > \)MR
  • C
    The values increase
  • D
    The values are same
    Correct
4
The relationship between AR and MR when and when price falls.
  • A
    The values decrease
  • B
    The values increase
  • C
    AR\( > \)MR
    Correct
  • D
    The values are same
5
Automobile industry is an example of?
  • A
    Oligopoly
  • B
    Monopoly
  • C
    Perfectly competitive
    Correct
  • D
    Imperfectly competitive
6
When a firm’s average revenue are more than its average total cost its profit will be?
  • A
    Normal profit
  • B
    None of above
  • C
    No profit
  • D
    Supernormal profit
    Correct
7
. Which of the following is not an essential condition of pure competition:
  • A
    Absence of transportation cost
    Correct
  • B
    Large number of buyers and sellers
  • C
    Freedom of entry
  • D
    Homogeneous product
8
In the long run competitive market?
  • A
    The firm will earn no profit
  • B
    Every firm will earn economic profit
  • C
    Every firm will incur losses
  • D
    Every firm will earn only normal profit
    Correct
9
Which one of the following statement is incorrect?
  • A
    Competitive firms are price takers and not price makers
  • B
    Price discrimination is possible in monopoly only
  • C
    Competitive firm always seeks to discriminate prices
    Correct
  • D
    Duopoly may lead to monopoly
10
What should firm do when marginal revenue is greater than marginal cost?
  • A
    Effect should be made to make them equal
  • B
    Firms should expand output
    Correct
  • C
    All of above
  • D
    Prices should be covered down
11
Perfectly competitive firm faces?
  • A
    Perfectly inelastic demand curve
  • B
    Perfectly elastic demand curve
    Correct
  • C
    Negative
  • D
    Zero
12
Price taker firms
  • A
    Do not advertise but give gifts along with the sold items to attract customers
  • B
    Do not advertise because they can sell as much as they wish at the prevailing price
    Correct
  • C
    Do not advertise their products because it misleads the customers
  • D
    Advertise their products to boost the level of demand
13
The relationship between TR and MR when price is constant.
  • A
    The values are same
  • B
    The values increase
  • C
    The values decrease
  • D
    MR will be constant but TR is a positively sloped straight line
    Correct
14
The break- even point is where TR=TC
  • A
    Yes
    Correct
  • B
    Can’t say
  • C
    Conditional
  • D
    No
15
The break- even point is where MR=MC
  • A
    No
  • B
    Can’t say
  • C
    None of these
  • D
    Yes
    Correct