Classical

Managerial Economics - Managerial Economics Multiple Choice Questions

16:  

Even in the long run equilibrium, the pure monopolist (as opposed to the perfectly competitive firm) can make abnormal profits because of

A.

Blocked entry

B.

His low LAC

C.

High price he charges

D.

Advertising

 
 

Option: A

Explanation :


17:  

After reaching the saturation point, consumption of additional units of the commodity causes

A.

Total utility and marginal utility both to increase

B.

Total utility to fall and marginal utility to increase

C.

Total utility to fall and marginal utility to become negative

D.

Total utility to become negative and marginal utility to fall

 
 

Option: C

Explanation :


18:  

Economies of Scale means

A.

Reductions in unit cost of production

B.

Reductions in unit cost of distribution

C.

Addition to the unit cost of production

D.

Reduction in the total cost of production

 
 

Option: A

Explanation :


19:  

Long run equilibrium price of a perfect competitive firm is always

A.

Equal to AFC

B.

Below the LAC

C.

Above the LAC

D.

Equal to LAC

 
 

Option: D

Explanation :


20:  

A falling MU curve illustrates

A.

The principle of diminishing marginal utility

B.

The principle of equi-marginal utility

C.

The principle of diminishing marginal rate of substitution

D.

None of these

 
 

Option: A

Explanation :




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