Suppose a competitive firm produces 100 units of X for a price of Rs.10 a unit. The firm is employing labour and capital such that the marginal physical product of labour and capital is 20 and 5 and the prices paid to labour and capital are Rs. 60 and Rs. 40 respectively. How would you characterize the firm

Related MCQs

• If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price is equal to average total cost, then the firm
• A monopolist produces 14,000 units of output and charges Rs.14 per unit. Its marginal revenue is Rs.8, its marginal cost is Rs.7 and rising, its average total cost is Rs.10, and its average variable cost is Rs.9. The monopolist should
• A perfectly competitive firm should reduce output or shut down in the short run if market price is equal to marginal cost and price is
• That the perfectly competitive firm will pick a combination of inputs where the ratio of each input’s marginal product to its price is equal follows from
• A firm under perfect competitions shall be in equilibrium when marginal cost will be equal to marginal revenue and marginal cost curve is still
• If a perfectly competitive firm finds that the profit maximizing output level occurs where price is equal to marginal cost but is less than average variable cost
• The pure monopolist who is nondiscriminating must decrease price on all units of a product sold in order to sell additional units. This explains why:
• Monopolistic competitive firm fixes the price of its product
• In the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is
• A firm is able to sell any quantity of a good at a given price. The firm’s marginal revenue will be: