Building the Supply Curve

Q.

At a price of Rs 100, the quantity of a good supplied by a firm is 5000. Which of these can be the quantity supplied when the price is Rs 200, assuming diminishing returns?

1. Rs 8000

2. Rs 2500

3. Rs 5000

4. Rs 10000

Q.

The total cost of production at different output levels for a firm are tabulated below. What is the profit-maximizing level of output at a market price of Rs 10?

$\begin{array}{cc}Q& TC\left(Rs\right)\\ 1& 15\\ 2& 22\\ 3& 27\\ 4& 31\\ 5& 38\\ 6& 49\\ 7& 63\end{array}$

1. 4

2. 1

3. 5

4. 6

Q.

The long-run supply curve of a firm follows the conditions:

1. P > LRAC : exit

2. P < LRAC : exit

3. P > LRAC : produce

4. P < LRAC : produce

Q.

The short-run supply curve of a firm is ______

1. the portion of the MC curve above the AVC curve

2. the portion of the MC curve above the SAC curve

3. the portion of the MC curve below the AVC curve

4. the portion of the MC curve below the SAC curve

Q.

Which of the following rules should be followed by a supplier for profit maximization?

1. Keep producing until the total revenue is equal to total cost.

2. produce an additional unit of good if the price is greater than the marginal cost

3. do not produce an additional unit if its marginal cost is higher than the marginal cost of the previously produced units

4. Always produce an additional unit when the marginal revenue is greater than zero.

Q.

For a price-taking firm, willingness to accept is equal to the ______.

1. marginal revenue

2. marginal cost

3. price

4. average total cost

Q. At the efficient scale of production, the long run ATC is Rs 20 and the output is Q. If the market price is Rs 10, the firm would supply .

1. Q
2. 2Q
3. Q/2
4. \N

Q. The minimum quantity that a firm supplies is 1000, at a price of Rs 20. The minimum average variable cost is Rs .

1. Rs 10
2. Rs 20
3. Rs 25
4. Rs 50