51
For the following two statements of Assertion (A) and Reason (R) suggest the correct option.Assertion (A) Low initial price regarded as the principal means for entering into mass market for some new products.Reason (R) Firms generally enter into production of new products with excess capacity of the plant initially.
A)
(A) is correct, but (R) is not correct
B)
(A) is not correct, but (R) is correct
C)
(A) and (R) both are correct and (R) is the right explanation of (A)
D)
(A) and (R) both are correct, but (R) is not the right explanation of (A)
Answer & Solution
Answer: Option
D
52
Match the following:
List-I (Subject of Managerial Economics) List-II (Example)
a. Business Environment
1. Govt. Policies
b. Capital Management
2. Cost of Capital
c. Profit Management
3. Profit Planning
d. Cost Analysis
4. Cost Concept
5. Price System
A)
a-1, b-2, c-3, d-4
B)
a-1, b-4, c-2, d-5
C)
a-3, b-1, c-2, d-4
D)
a-3, b-4, c-2, d-1
Answer & Solution
Answer: Option
A
53
The degree of monopoly power can be measured by the formula
A)
$$\frac{{P - MC}}{P}$$
B)
$$\frac{{MR}}{{AR - MR}}$$
C)
$$\frac{{AR}}{{AR - MR}}$$
D)
$$\frac{{AR - MR}}{{MR}}$$
Answer & Solution
Answer: Option
A
54
Price discrimination is possible when
A)
elasticities of two markets are not known
B)
both markets have different elasticities of demand at the ruling price
C)
both markets have same elasticities of demand
D)
different products are made for two markets
Answer & Solution
Answer: Option
B
55
The LAC curve is tangent to the lowest point on the SAC curves when the LAC curve is
A)
Rising
B)
Falling
C)
At its minimum
D)
None of these
Answer & Solution
Answer: Option
C
56
Under price discrimination, price will be higher in the market where demand is
A)
Highly elastic
B)
Unitary elastic
C)
Less elastic
D)
None of the above
Answer & Solution
Answer: Option
C
57
Direct regulation of business has the poten tial to yield economic benefits to society when
A)
diseconomies of scale exist
B)
barriers to entry are absent
C)
there are no good substitutes for a product
D)
many firms serve a given market
Answer & Solution
Answer: Option
C
58
Match the following:
a. For a given 10 percent change in price, demand changes by zero percent
1. e > 1
b. For a given 10 percent change in price, demand changes by 5 percent
2. e = 1
c. For a given 10 percent change in price, demand changes by 10 percent
3. e < 1
d. For a given 10 percent change in price, demand changes by 20 percent
4. e = 0
A)
a-1, b-2, c-3, d-4
B)
a-4, b-3, c-2, d-1
C)
a-3, b-1, c-2, d-4
D)
a-2, b-3, c-1, d-4
Answer & Solution
Answer: Option
B
59
Match the following:
List-I (Items) List-II (Applications)
a. Additional Value
1. $$\frac{{{\text{Proposed Expenditure}}}}{{{\text{Contribution per units}}}}$$
b. MOS
2. Total sales - B.E. sales
c. MOS (in percent)
3. $${\text{Profit}} \div \frac{{{\text{Contribution}}}}{{{\text{Sales}}}}$$
d. Sales (in Rs.)
4. $$\frac{{{\text{FC}} + {\text{Profit}}}}{{1 - \frac{{{\text{VC}}}}{{{\text{Sales}}}}}}$$
A)
a-3, b-1, c-4, d-2
B)
a-3, b-4, c-2, d-1
C)
a-3, b-1, c-2, d-4
D)
a-1, b-2, c-3, d-4
Answer & Solution
Answer: Option
C
60
Increasing returns imply
A)
External economies
B)
Diminishing cost per unit of output
C)
Optimum use of capital and factor
D)
Constant average cost
Answer & Solution
Answer: Option
B
