The Theory of the Firm under Perfect Competition MCQ Questions for Class 11 Ecomonics Chapter 4 with Answers

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MCQ Questions for Class 11 Ecomonics with Answers: Introductory Microeconomics

Q1. MR of nth unit is given by:

(i) TRn/TRn – 1
(ii) TRn + TRn – 1
(iii) TRn – TRn – 1
(iv) All of these

(iii) TRn – TRn – 1

Q2. Market which have two firms are known as:

(i) Oligopoly
(ii) Duopoly
(iii) Monopsony
(iv) Oligopsony

(ii) Duopoly

Q3. Under monopoly price discrimination depends upon:

(i) Elasticity of demand for commodity
(ii) Elasticity of supply for commodity
(iii) Size of market
(iv) All of above

(i) Elasticity of demand for commodity

Q4. Profits of the firm will be more at:

(i) MR = MC
(ii) Additional revenue from extra unit equalits additional cost
(iii) Both of above
(iv) None

(iii) Both of above

Q5. Under which of the following forms of market structure does a firm has no control over the price of its product:

(i) Monopoly
(ii) Oligopoly
(iii) Monopolistic competition
(iv) Perfect competition

(iv) Perfect competition

Q6. The concept of supply curve is relevant only for?

(i) Monopoly
(ii) Monopolistic competition
(iii) Perfect competition
(iv) Oligopoly

(iii) Perfect competition

Q7. In perfect competition, since the firm is a price taker, the __ curve is straight line

(i) Total cost
(ii) Marginal cost
(iii) Total revenue
(iv) Marginal revenue

(iv) Marginal revenue

Q8. Under perfect competition the number of firms

(i) Is about 10
(ii) Are many but limited
(iii) Is large
(iv) Is limited

(iii) Is large

Q9. The elasticity at a point on a straight line supply curve passing through the origin will be

(i) 3.0
(ii) 1.0
(iii) 4.0
(iv) 2.0

(ii) 1.0

Q10. Before producer’s equilibrium when MR > MC, the firm earns only

(i) Normal Profit
(ii) Normal loss
(iii) Abnormal loss
(iv) Abnormal profit

(iv) Abnormal profit

Q11. Monopolist can determine:

(i) Price
(ii) Output
(iii) Either price or output
(iv) None

(iii) Either price or output

Q12. Firms in a monopolistic market are price _:

(i) Takers
(ii) Givers
(iii) Makers
(iv) Acceptors

(iii) Makers

Q13. What should firm do when Marginal revenue is greater than marginal cost?

(i) Firm should expand output
(ii) Effect should be made to make them equal
(iii) Prices should be covered down
(iv) All of these

(i) Firm should expand output

Q14. Given the relation MR=P(1-\cfrac { 1 }{ e } ) if e > 1, then :

(i) MR > 0
(ii) MR < 0
(iii) MR = 0
(iv) None

(i) MR > 0

Q15. Which of the following is not an essential condition of pure competition?

(i) Large number of buyers and sellers
(ii) Homogeneous product
(iii) Freedom of entry
(iv) Absence of transport cost

(iv) Absence of transport cost

Q16. Other name by which average revenue curve known:

(i) Indifference curve
(ii) Profit curve
(iii) Average cost curve
(iv) Demand curve

(iv) Demand curve

Q17. When _, the firms are earning just normal profit:

(i) AC = AR
(ii) MC = AC
(iii) AR = MR
(iv) MC = MR

(i) AC = AR

Q18. The elasticity at a point on a straight-line supply curve passing through the origin making an angle of 45° will be

(i) 4.0
(ii) 2.0
(iii) 3.0
(iv) 1.0

(iv) 1.0

Q19. A producer’s equilibrium is a situation when

(i) AR = MR
(ii) MR = MC
(iii) AR = AC
(iv) TR = TC

(ii) MR = MC

Q20. Beyond producer’s equilibrium when MR<MC, the firm earns only

(i) Abnormal profit
(ii) Normal loss
(iii) Abnormal loss
(iv) Normal Profit

(iii) Abnormal loss

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