Economics

Which of the following are sufficient to determine the shutdown point of multi commodity firm in the short - run?

A. Variable cost of operations

B. Marginal revenue received

C. Average variable cost of operations

D. Average marginal revenue received

Choose the most appropriate answer from the options given below:

• A and B only

• C and D only

• A, B and C only

• B, C and D only

Which two of the following statements are correct?

a) In the short - run, A TFC = O, therefore A TC = A TVC

b) If decrease In AFC < Increase In AVC, then AC decreases c) If decrease In AFC = Increase In AVC, AC remains constant

d) If decreases In AFC > Increase In AVC, then AC Increases Choose the correct answer from the options given below:

• a) and c)

• b) and c)

• b) and d)

• a) and d)

In a perfectly competitive market, a firm in the long run operates at the level of output where:

• AC = MC when MC is lowest

• MC = AR = MR when MC is lowest

• MR = MC

• AR=MR=AC=MC

Under which of the following situations, economies of scale exists to the potential and persists?

• When firm is too small and too specialized

• When firms' decision to hire inputs do not result in an increase in the input costs

• When firm is too large and overdiversified

• When long-run cost of producing a unit falls as the output increases

Assertion A): At times, a business may face a situation where it has to shut down its operations.

Reason R): If the revenue is less than its variable cost, the operation should be closed down.

In the context of the above two statements, which one of the following codes is correct?

• A) is correct but R) is not correct

• A) and R) both are correct and R) is the right explanation of A

• A) and R) both are correct and R) is not the right explanation of A

• Both A) and R) are incorrect

X : Long run average cost curve is flat U-shaped.

Y : It is called an envelope curve

• Only X is correct

• Only Y is correct

• Both X and Y are correct

• Both X and Y are incorrect

What is the reason behind the upward sloping portion of the long-run cost curve

• Diseconomies of scale

• Economies of scale

• Diminishing marginal return

• None of the above

Profits are maximized at a point where

• MR = MC

• MR < MC

• MR > MC

• AC > MC