Building the Supply Curve

Q.

Record the daily expenditure, quantities bought and prices paid per unit of the daily purchases of your family for two weeks. How has the price change affected your family?

Q.

What is a good return on equity?

Q. Profit is maximised at that level of output where three conditions hold, which are _________.

1. marginal revenue is equal to the marginal cost
2. all of these
3. marginal cost is non-decreasing
4. in the short run, the market price must be greater than or equal to the average variable cost

Q. If a country wants to produce more of one good, it has to produce less of the other - what implication does this statement have on the shape of PPC?

1. It becomes upward sloping.
2. It becomes downward sloping.
3. It falls at constant rate
4. It is convex to the origin.

Q. For maximization of profits, MR = MC is the first order condition under which of the following market structures?

1. Perfect competition
2. Monopoly
3. Monopoly as well as perfect competition
4. In any type of market

Q. If a firms cost of raw material increases then _________.

1. marginal cost curve will shift upward
2. marginal cost curve will shift downward
3. equilibrium level of quantity also increases
4. market price of the final product will also increase