Economics

✅ The correct answer is A.
Total utility is maximum when Marginal utility is zero. It is based in the law of diminishing marginal utility which says ‘as more and more units of a good are consumed, MU i.e level of satisfaction derived from each successive unit goes on falling because desire for that commodity tend to fall.

✅ The correct answer is D.
Average fixed cost curve is never U-shaped. The average fixed costs AFC curve is downward sloping because fixed costs are distributed over a larger volume when the quantity produced increases.

✅ The correct answer is D.
The individual firm is unable to affect market price through its output decisions best describes this smallness.

✅ The correct answer is C.
The ‘substitution effect’ takes place due to change in Relative prices of the commodities. The substitution effect refers to the change in demand for a good as a result of a change in the relative price of the good in terms of other goods.

✅ The correct answer is A.
In monopoly and perfect competition, the cost curves are same. In a monopoly, the price is set above marginal cost and the firm earns a positive economic profit. Perfect competition produces an equilibrium in which the price and quantity of a good is economically efficient.

✅ The correct answer is C.
Demand curve can be derived from MU curve and PCC. Marginal utility and the law of diminishing marginal utility can be used to provide insight into market demand, the law of demand, and the demand curve. Downward-sloping price consumption curve for a good means that demand for the good is elastic, upward-sloping price consumption curve means that demand for the good is inelastic and horizontal straight-line price consumption curve means that demand for the good is unit elastic.

✅ The correct answer is C.
One characteristic not typical of oligopolistic industry is Horizontal demand curve. The horizontal demand curve indicates that the elasticity of demand for the good is perfectly elastic. This means that if any individual firm charged a price slightly above market price, it would not sell any products.

✅ The correct answer is D.
When marginal is negative, it must be true that the total is decreasing. Marginal utility may decrease into negative utility, as it may become entirely unfavorable to consume another unit of any product.

✅ The correct answer is B.
A factor of production, whose supply is fixed in the short run, may get additional earnings. These earnings are generally referred to as Quasi-rent. The earnings from machines and instruments are termed as quasi-rent. The quasi-rent refers to the income produced when the demand for products increases suddenly.

✅ The correct answer is A.
At the point of equilibrium of firm (under perfect competition) MC curve must be rising. If the firm is producing at an output level where the MC is falling, then this implies that it can further increase the profit by slightly raising the level of output. Equilibrium is established at the point where the MR is equal to MC and MC is rising.