Economics - Study Mode

[#196] A rise in supply and demand in equal proportion will result in
Correct Answer

(C) No change in equilibrium price and increase in equilibrium quantity

Explanation

Solution: A rise in supply and demand in equal proportion will result in no change in equilibrium price and increase in equilibrium quantity.

[#197] Zubair has a special taste for college canteen's hotdogs. The owner of the canteen doubles the prices of hotdogs. Zubair did not respond to the increase in prices and kept on demanding the same quantity of hotdogs. His demand for hotdogs is
Correct Answer

(B) Perfectly inelastic

Explanation

Solution: Zubair has a special taste for college canteen's hotdogs. The owner of the canteen doubles the prices of hotdogs. Zubair did not respond to the increase in prices and kept on demanding the same quantity of hotdogs. His demand for hotdogs is perfectly inelastic.

[#198] If regardless of changes in its price, the quantity demanded of a commodity remains unchanged, then the demand curve for the commodity will be
Correct Answer

(B) Vertical

Explanation

Solution: If regardless of changes in its price, the quantity demanded of a commodity remains unchanged, then the demand curve for the commodity will be Vertical.

[#199] The situation of monopolistic competition is created by
Correct Answer

(D) All of the above

Explanation

Solution: The situation of monopolistic competition is created by Small number of producers of a commodity, Lack of homogeneity of the product produced by different firms and Imperfection of the market for that product.

[#200] In case of perfect competition in the market
Correct Answer

(C) Marginal revenue is always equal to average revenue

Explanation

Solution: In case of perfect competition in the market marginal revenue is always equal to average revenue. They coincide because marginal revenue is equal to average revenue at every output quantity. The equality between marginal revenue and average revenue is the result of perfect competition.