Where will a firm make its long-run output decision?
Correct answer C. Where marginal revenue equals long-run marginal cost
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Economics MCQs
Page 91 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 91 of 131
- Miscellaneous Economics 737
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At what point does the short-run marginal cost curve cut the short-run average total cost and short-run average variable cost curves?
Correct answer D. At their lowest points
If all factors but one are held constant and that variable factor is increased, its marginal product is expected to fall steadily. What is this an example of?
Correct answer A. The law of diminishing returns
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In a competitive industry, how does each buyer and seller behave?
Correct answer C. Each is a price taker
Which conditions are needed for perfect competition to work?
Correct answer E. All of the above
What does the demand curve facing a competitive firm look like?
Correct answer D. Horizontal
At what level of output does a competitive firm produce?
Correct answer C. Where price equals marginal cost
Which of the following is true under perfect competition?
Correct answer C. There are many buyers and sellers
Which condition holds in the long run under perfect competition?
Correct answer C. Price = average cost = marginal cost
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Which of the following is NOT a feature of a competitive market?
Correct answer A. Firms generate small but positive economic profits in the long run
What happens to a competitive firm’s total revenue if it doubles its output?
Correct answer B. It doubles
Up to what point does a competitive firm produce in order to maximise profit?
Correct answer B. Where marginal cost equals marginal revenue
In the short run, which part of its cost curves makes up a competitive firm’s supply curve?
Correct answer E. The portion of the marginal cost curve that lies above the average variable cost curve
When should a grocery store close at night?
Correct answer B. When the variable costs of staying open are greater than the total revenue from staying open
In the long run, some firms will leave the market if the price of the good falls below which of the following?
Correct answer C. Average total cost
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If an input needed for production is in limited supply, so that industry expansion raises costs for all existing firms, what could the long-run market supply curve look like?
Correct answer B. Upward sloping
In the long-run equilibrium of a competitive market, at which of the following are firms operating?
Correct answer E. All of these answers are correct
What is the limit on the consumption bundles a consumer can afford called?
Correct answer B. The budget constraint
What shape are the indifference curves for perfect substitutes?
Correct answer D. Straight lines
Which of the following is not one of the four Ps of marketing?
Correct answer A. Presence