Classical

Managerial Economics - Managerial Economics MCQ

21:  

A circumstance in which it might pay a monopolist to cut the price of his product is where

A.

MC is falling

B.

MR is greater than MC

C.

His advertising costs are increasing

D.

Average costs seem about to fall

 
 

Option: A

Explanation :

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22:  

From the resource allocation view point, perfect competition is preferable because

A.

There is no restriction on entry and exit of firms

B.

There is a whole variety of output produced

C.

The firms operate at excess capacity levels

D.

There is no idle capacity

 
 

Option: D

Explanation :

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23:  

Put into chronological order on the basis of development:

1. Law of demand

2. Law of indifference

3. Law of diminishing marginal utility

4. Revealed preference curve

5. Indifference curve

A.

1 3 4 2 5

B.

1 5 3 4 2

C.

1 3 2 5 4

D.

1 2 3 4 5

 
 

Option: C

Explanation :

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24:  

The falling part of a TU curve shows

A.

Zero marginal utility

B.

Decreasing marginal utility

C.

Increasing marginal utility

D.

Negative marginal utility

 
 

Option: D

Explanation :

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25:  

Given the cost conditions

A.

Monopoly output will be higher and prices lower than under pure competition

B.

Monopoly output will be lower and price higher than under pure competition

C.

Monopoly output and price will be higher than under pure competition

D.

Monopoly output and price will be lower than under pure competition

 
 

Option: B

Explanation :

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