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Assertion (A): If the monopolist faces identical demand curves for his commodity in two separate markets, by practising third degree price discrimination, he cannot increase his TR and total profits.<br>Reason (R): As the marginal revenue curves are identical when the demand curves in the two markets are the same, the monopolist will not charge different prices in each market to maximise profits.

Correct Answer: Both A and R are true and R is the correct explanation of A

Consider the following statements.
1. A profit maximising monopolist in different markets will adjust his sales in the two markets, so that his MR in each market just equals his MC.
2. A profit maximising monopolist in separate markets will not adjust his sales.
3. A profit maximising monopolist in separate markets will adjust his sales in the two markets, so that his MR in each market will greater than MC.
4. A profit maximising firm in separate markets will adjust his sales in each market so, that his MR is less than MC.
Which of the statement(s) given above is/are correct?

Consider the following statements:
1. A profit-maximizing monopolist in different markets will adjust his sales in the two markets to just equal his MC.
2. A profit-maximizing monopolist in separate market will not adjust his sales.
3. A profit-maximizing monopolist in separate markets will adjust his sales.
4. A profit-maximizing firm in separate markets will adjust his sales in each market so that his MR is less than Me.

Consider the following statements.
1. One way the government can induce a monopolist to expand his output is by imposing a price ceiling that make the monopolist lower his price.
2. MC = MR = AC = AR shows the equilibrium position of the competitive firm.
3. One way the government can induce a monopolist to expand his output by imposing a price floor that makes the monopolist raise his price.
4. One way the government can induce a monopolist to expand his output by imposing a specific tax on the monopolist output.
Which of the statement(s) given above is/are correct?

The question below consists of a set of labelled sentences. Out of the four options given, select the most logical order of the sentences to form acoherent paragraph.
P: The recent reduction in interest rates in the US and the injection of liquidity have resulted in investors seeking new avenues such as commodity markets, in view
of the turbulence in financial markets and the low returns in treasuries.
Q: The relatively easy liquidity and low interest rates, by themselves, make holding of inventories attractive and thus induce volatility in commodity markets.
R: The financialisation of commodity trade and current extraordinary conditions in global financial markets could have influenced the spurt in prices.
S: The weakening of the US dollar is also advanced as a reason for the recent volatility in commodity markets, including food items.

Consider the following statements
1. One way for the government to induce a monopolist to expand his output is by imposing a price ceiling that makes the monopolist lower his price.
2. MC = MR = AC = AR shows the equilibrium position of the competitive firm.
3. One way for the government to induce a monopolist is to make the monopolist raise his price.
4. One way for the government to induce a monopolist is to expand his output by imposing a specific tax on the monopolist output.

Read the following passage carefully and choose the most appropriate answer to the question out of the four alternatives.
Most economists in the United States seem captivated by the spell of the free market. Consequently, nothing seems good or normal that does notaccord with the requirements of the free market. A price that is determined by the seller or, for that matter (for that matter: so far as that isconcerned), established by anyone other than the aggregate of consumers seems pernicious. Accordingly, it requires a major act of will to thinkof price-fixing (the determination of prices by the seller) as both "normal" and having a valuable economic function. In fact, price-fixing is normalin all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixingthat it requires. Modern industrial planning requires and rewards great size. Hence, a comparatively small number of large firms will be competingfor the same group of consumers. That each large firm will act with consideration of its own needs and thus avoid selling its products for morethan its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with fullconsideration of the needs that it has in common with the other large firms competing for the same customers. Selling a commodity at a price that is not more than that charged by competitors is -

Read the following passage carefully and choose the most appropriate answer to the question out of the four alternatives.
Most economists in the United States seem captivated by the spell of the free market. Consequently, nothing seems good or normal that does notaccord with the requirements of the free market. A price that is determined by the seller or, for that matter (for that matter: so far as that isconcerned), established by anyone other than the aggregate of consumers seems pernicious. Accordingly, it requires a major act of will to thinkof price-fixing (the determination of prices by the seller) as both "normal" and having a valuable economic function. In fact, price-fixing is normalin all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixingthat it requires. Modern industrial planning requires and rewards great size. Hence, a comparatively small number of large firms will be competingfor the same group of consumers. That each large firm will act with consideration of its own needs and thus avoid selling its products for morethan its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with fullconsideration of the needs that it has in common with the other large firms competing for the same customers. Who, according to the economists, are the right group of people to set the price of a commodity?

From the following determinants of the price elasticity of demand, indicate the correct option for the determinants having a positive relationship with the degree of the price elasticity of demand.
1. Range of substitutes of the commodity
2. Extent of the different uses of the commodity
3. Portion of the income of the buyer spent on the commodity
4. Income group of buyers purchasing the commodity

Consider the following statements
1. Decrease in demand is caused by change in factors other than own price of the commodity.
2. Contraction of demand is caused by decrease in own price of the same commodity.
3. Extension of demand is caused by increase in own price of the same commodity.
Which of the statement(s) given above is/are correct?

Read the following passage carefully and choose the most appropriate answer to the question out of the four alternatives.
Most economists in the United States seem captivated by the spell of the free market. Consequently, nothing seems good or normal that does notaccord with the requirements of the free market. A price that is determined by the seller or, for that matter (for that matter: so far as that isconcerned), established by anyone other than the aggregate of consumers seems pernicious. Accordingly, it requires a major act of will to thinkof price-fixing (the determination of prices by the seller) as both "normal" and having a valuable economic function. In fact, price-fixing is normalin all industrialized societies because the industrial system itself provides, as an effortless consequence of its own development, the price-fixingthat it requires. Modern industrial planning requires and rewards great size. Hence, a comparatively small number of large firms will be competingfor the same group of consumers. That each large firm will act with consideration of its own needs and thus avoid selling its products for morethan its competitors charge is commonly recognized by advocates of free-market economic theories. But each large firm will also act with fullconsideration of the needs that it has in common with the other large firms competing for the same customers. Price-fixing is a phenomenon that is normal in -