CA Foundation Exam > CA Foundation Questions > Which of the following statements is correct?...
Start Learning for Free
Which of the following statements is correct?
- a)Monopolist can earn only profits
- b)Firms in a perfectly competitive market are price maker
- c)Industry in a perfectly competitive market is a price taker
- d)AR curve and demand curve are same
Correct answer is option 'D'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Which of the following statements is correct?a)Monopolist can earn onl...
I think, in this question
The answer would be "c" because of the firm is a price taker who is lie in the perfect competition market.
The answer would be "c" because of the firm is a price taker who is lie in the perfect competition market.
Free Test
FREE
| Start Free Test |
Community Answer
Which of the following statements is correct?a)Monopolist can earn onl...
Statement: AR curve and demand curve are same.
Explanation:
AR (Average Revenue) curve and demand curve are two different concepts in economics. However, in a perfectly competitive market, the AR curve and demand curve are the same.
Here's why:
- In a perfectly competitive market, there are numerous buyers and sellers.
- Each seller sells an identical product and has no control over the market price.
- Therefore, the market demand curve is perfectly elastic, i.e., horizontal at the market price.
- Since the demand curve is horizontal, the AR curve, which represents the revenue earned per unit of output sold, is also horizontal at the market price.
- Hence, in a perfectly competitive market, the AR curve and demand curve are the same.
In other market structures such as monopoly, oligopoly, or monopolistic competition, the AR curve and demand curve are not the same. The demand curve is downward sloping, reflecting the fact that the monopolist or oligopolist has some control over the market price and must lower the price to sell more units. As a result, the AR curve is also downward sloping.
Conclusion:
Therefore, option 'D' is the correct answer as in a perfectly competitive market, the AR curve and demand curve are the same.
Explanation:
AR (Average Revenue) curve and demand curve are two different concepts in economics. However, in a perfectly competitive market, the AR curve and demand curve are the same.
Here's why:
- In a perfectly competitive market, there are numerous buyers and sellers.
- Each seller sells an identical product and has no control over the market price.
- Therefore, the market demand curve is perfectly elastic, i.e., horizontal at the market price.
- Since the demand curve is horizontal, the AR curve, which represents the revenue earned per unit of output sold, is also horizontal at the market price.
- Hence, in a perfectly competitive market, the AR curve and demand curve are the same.
In other market structures such as monopoly, oligopoly, or monopolistic competition, the AR curve and demand curve are not the same. The demand curve is downward sloping, reflecting the fact that the monopolist or oligopolist has some control over the market price and must lower the price to sell more units. As a result, the AR curve is also downward sloping.
Conclusion:
Therefore, option 'D' is the correct answer as in a perfectly competitive market, the AR curve and demand curve are the same.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Top Courses for CA FoundationView all
Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer?
Question Description
Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer?.
Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following statements is correct?a)Monopolist can earn only profitsb)Firms in a perfectly competitive market are price makerc)Industry in a perfectly competitive market is a price takerd)AR curve and demand curve are sameCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup