MCQs Micro Eco in English, Equilibrium of Firm in Prefect Competition

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Micro Economics    

Equilibrium of Firm in Prefect Competition

How many firms are there in perfect competition?

200	500
1000	Unlimited

This is the basic condition of perfect competition.

Freedom of entry	Homogenous price
No interference of Government	All

Firms are free to enter or exit in

Monopoly	Perfect competition
Duopoly	Oligopoly

These are kinds of monopoly.

Pure monopoly	Duopoly
Oligopoly	All

A firm may be in equilibrium:

At profit	In loss
At break even	All

If the firm is in loss at equilibrium, it wishes to:

Maximise profit	Minimize loss
To cover loss	To gain profit

When a firm enjoys profit at equilibrium, its Avg. Cost (AC) curve must be    

Over Avg. Revenues (AR)	Below Avg. Revenue (AR)
At Avg. Revenue (AR)	None

At breakeven point, firm’s Avg. Cost (AC) curve must be         

Over Avg. Revenues (AR)	Below Avg. Revenue (AR)
Equal to Avg. Revenue (AR)	None

When the firm gains profit at equilibrium, it wishes to:

Maximise profit	Minimize loss
To cover loss	To gain profit

In perfect competition, generally the prices are

The same	Different
Higher	Lower

When a firm is in loss, its Avg. Cost (AC) curve must be           

Over Avg. Revenues (AR)	Below Avg. Revenue (AR)
At Avg. Revenue (AR)	None

In perfect competition:

P = MR	P > MR
P < MR	All

These curves are the same in perfect competition.         

Price & MR	Price, MR & AR
MR & AR	TR & MR

In perfect competition, the firm faces demand curve     

Inelastic	Perfect elastic
Both	None

At breakeven point in perfect competition, firm gains

Normal profit	Higher profit
A little profit	All

A firm gains equilibrium at

MC = MR	AC = AR
MC < MR	AC < AR

The basic motive of a firm is to earn:

Reputation	Profit
Revenues	interest

This is pure monopoly.

Monopoly	Duopoly
Oligopoly	All

TC means

FC+VC	FC-VC
FC+MC	FC-MC

An industry is the collective name of:

Alike firms	All firms
Many firm	Different firms

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