The theory of the second best suggests that in the absence of perfect competition a privatized industry should charge a price of ?

Related Mcqs:

1. Monopolistic competition differs from perfect competition primarily because ?

   A. in monopolistic competition entry into the industry is blocked
   B. in monopolistic competition there are relatively few barriers to entry.
   C. in monopolistic competition, firms can differentiate their products
   D. in perfect competition firms can differentiate their products

2. The long-run equilibrium outcomes in monopolistic competition and perfect competition are similar because in both market structures ?

   A. the efficient output level will be produced in the long run
   B. firms will only earn a normal profit
   C. firms realize all economies of scale
   D. firms will be producing at minimum average cost

3. The cosmetics industry is not considered by economists to be a good example of perfect competition because ?

   A. there are many EU and government health controls on cosmetic products
   B. there are a very large number of firms in the industry
   C. firms spend a large amount of money on advertising
   D. profit margins are very high for both producers and retailers

4. A firm in perfectly competitive industry is producing 50 units, its profit-maximising quantity. Industry price is £2 and total fixed costs and total variable cost are £25 and £40 respectively. The firm’s economic profit is ?

   A. £35
   B. £15
   C. £30
   D. £60

5. perfect international capital mobility suggests that international funds will be responsive to ________ differentials?

   A. current account
   B. interest rate
   C. tax
   D. price

6. Firms in perfect competition face a?

   A. perfectly elastic demand curve
   B. perfectly inelastic demand curve
   C. perfectly elastic supply curve
   D. perfectly inelastic supply curve

7. A profit maximizing firm is perfect competition produces where ?

   A. Total revenue is maximized
   B. Marginal revenue equals zero
   C. Marginal revenue equals marginal cost
   D. Marginal revenue equals average cost

8. In the long run in perfect competition ?

   A. The price equals the total revenue
   B. Firms are allocatively inefficient
   C. Firms are productively efficient
   D. The price equals total cost

9. In perfect competition ?

   A. The price equals the marginal revenue
   B. the price equals the average variable cost
   C. the fixed cost equals the variable costs
   D. the price equals the total cost

10. In perfect competition ?

    A. The products firm offer is very similar
    B. Products are heavily differentiated
    C. A few firms dominate the market
    D. Consumer have limited information