The marginal cost is equal is to marginal revenue, the average cost is equal to average revenue, average revenue is equal to marginal revenue, and the average cost is equal to marginal cost. This is the condition of<br>1. Long-period equilibrium for a firm under monopoly.<br>2. Short-period equilibrium for a firm under oligopoly.<br>3. Long-period equilibrium<br>4. Long-period equilibrium for a firm under perfect competition.

Marginal cost is equal to marginal revenue, average cost is equal to average revenue, average revenue is equal to marginal revenue and average cost is equal to marginal cost. This is the condition of
1. long period equilibrium for a firm under monopoly
2. short period equilibrium for a firm under oligopoly
3. long period equilibrium
4. long period equilibrium for a firm under perfect competitions
Select the correct answer

A

Both 1 and 4

B

Both 3 and 4

C

Both 3 and 1

D

Only 1

In perfect competition, when a firm is in short periods, for equilibrium, the following condition does apply
1. Marginal cost must equal marginal revenue.
2. Average cost must equal average revenue.
3. Marginal revenue must equal average revenue.
4. Marginal cost must equal average cost.

A

1, 2 and 3

B

1 and 3

C

2, 3 and 4

D

Only 3

If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and the price is equal to the average total cost, then the firm is

A

In long-run equilibrium

B

In short-run equilibrium

C

Minimizing short-run average total cost

D

Breaking even

Assertion (A) All firms under perfect competition in long run earn only normal profit.
Reason (R) All firms under perfect competition in long run operate at the minimum average cost level.

A

Both (A) and (R) are true

B

(A) is true, but (R) is not true

C

(A) is not true, but (R) is true

D

Both (A) and (R) are false

When labour is plotted on X-axis and capital is plotted on Y-axis and an isoquant is prepared, then which of the following statement(s) is/arefalse?
1. Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant.
2. Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour.
3. Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.

A

Both 1 and 2

B

Only 3

C

Only 1

D

Only 2

Which of the following statements are true?
1. Marginal costing is not an independent system of costing.
2. In marginal costing, all fundamentals of cost are divided into fixed and variable components.
3. In marginal costing, fixed costs are treated as product cost.
4. Marginal costing is not a technique of cost analysis.

A

Both 4 and 1

B

Both 2 and 3

C

Both 1 and 2

D

Both 2 and 4

A perfect cube is an integer whose cube root is an integer. For example, 27, 64 and 125 are perfect cubes. If p and q are perfect cubes, which of the following will not necessarily be a perfect cube?

A

8p

B

pq

C

pq+27

D

-p

A monopolist produces 14,000 units of output and charges Rs. 14 per unit. Its marginal revenue is Rs. 8, its marginal cost is Rs. 7 and rising, its average total cost is Rs. 10, and its average variable cost is Rs. 9. The monopolist should

A

Increase output, which will increase the firm's positive economic profit

B

Increase output, which will reduce the firm's economic losses

C

Shut down, which will reduce the firm's economic losses

D

Decrease output, which will increase the firm's positive economic profit

The condition of long period equilibrium for a firm operating under perfect competition is-

A

AC = MR = MC

B

MC = MR = AR

C

AC = MC

D

AR = MR

A particular price level, there are no forces tending to move it either up or down, it means
1. the firm is in equilibrium.
2. the price is in equilibrium.
3. the equilibrium price of the firm.
4. the equilibrium price and quantity of a firm.
Select the correct answer

A

Both 1 and 4

B

1, 2 and 4

C

Both 1 and 3

D

Only 4