Question

True/False

Indicate whether the statement is true or false.

____     1.   The basic disadvantage of a proprietorship is unlimited liability.

____     2.   An investor will diversify his portfolio to reduce risk.

____     3.   Investors must rely on stockbrokers to give detailed, day-to-day reports on stocks and bonds.

____     4.   One effect of speculators is to iron out price fluctuations because this is the way they make their profits.

____     5.   A perfectly competitive firm's short-run supply is infinite at the market price.

____     6.   In a long-run equilibrium in a perfectly competitive market, the average firm earns positive economic profits.

____     7.   An industry supply curve is the horizontal summation of the supply curves of all of the individual firms.

____     8.   In long-run equilibrium in perfect competition, every firm is producing at minimum average cost.

____     9.   Control of a scarce resource or input can serve as an entry barrier.

____   10.   Technical superiority can be a source of entry barriers.

____   11.   The drug maker Roche enjoyed a monopoly of the antibiotic Rocephin because of patent rights.

____   12.   A monopolist is a price maker who will lose some business if the price is increased.

____   13.   A monopolist faces a horizontal demand schedule.

____   14.   A monopolist's profit per unit is shown by the difference between price and average cost per unit.

____   15.   The rule of MC = MR does not apply to a monopolist.

____   16.   Although monopoly has lower output than competition, the level of output is efficient.

____   17.   A monopolist can earn a positive economic profit, even in the long run.

____   18.   A monopoly may breed inefficiency by reducing competition and restricting production.

____   19.   Since a monopolist has a unique product, it makes no sense for the firm to advertise.

____   20.   An oligopoly is a market dominated by a few sellers.

____   21.   Oligopolistic firms never collude because they have almost no incentive to do so.

____   22.   An oligopoly firm with a differentiated product will generally earn the largest profits without advertising.

____   23.   Sales maximization and profit maximization are essentially equivalent.

____   24.   To maximize sales revenue, an oligopoly will expand output until the price is zero.

____   25.   The kinked demand curve is an explanation of sticky prices.

Answer 1

AAnswer for1) is True as responsibility of bad events lie on shoulder of propreitor

Ans fr 2) True An Investor will always minimise his risk by diversification

Ans fr 3) False

Ans fr 4) True as Speculators arbitragers and Hedgers make the market by encashig arbitrage opportunity

Ans fr 15) False , For Monopolist Profit maximising condition is MR=MC

Ans fr 16) False

Ans fr 13) False..Downward Sloping

Ans for 25) True

Ans for 20) True

Ans for 14) True

Ans for 9) True