Higher Study | Business Economics

Under which of the following situations, economies of scale exists to the potential and persists?

ক

When firm is too small and too specialized

খ

When firm's decision to hire inputs do not result in an increase in the input costs

গ

When firm is too large and overdiversified

ঘ

When long-run cost of producing a unit falls as the output increases

Given below are two statements. One is labelled as Assertion (A) and the other is labelled as Reason (R). Assertion (A): In the case of short-run cost behaviour, MC curve intersects AC curve at its minimum Reason (R): While AC continues to decrease, MC begins to rise. Also, when AC is at its minimum, it is neither increasing nor decreasing. It is constant when AC is constant, it is equal to MC at the point of intersection Choose the correct option from those below 1. Both A) and R) true and R) is the correct explanation of A) 2. Both A) and R) true but R) is NOT the correct explanation of A) 3. A) is true but R) is false 4. A) is false but R) is true

ক

1

খ

2

গ

3

ঘ

4

In a perfectly competitive market, a firm in the long run operates at the level of output where :

ক

AC = MC when MC is lowest

খ

MC = AR = MR when MC is lowest

গ

MR = MC

ঘ

AR = MR =AC = MC

Assertion A): At times, a business may face a situation where it has to shut down its operations. Reason R): If the revenue is less than its variable cost, the operation should be closed down. In the context of the above two statements, which one of the following codes is correct?

ক

A) is correct but R) is not correct

খ

A) and R) both are correct and R) is the right explanation of A)

গ

A) and R) both are correct and R) is not the right explanation of A)

ঘ

Both A) and R) are incorrect

Which of the following are the methods of determining cost behaviour? a) High and low point method b) Least square regression method c) Accounting or analytical approach d) Non - parametric method Choose the correct answer from the options given below

ক

a), b) and d)

খ

a), c) and d)

গ

b), c) and d)

ঘ

a), b) and c)

The technique of marginal costing is based upon which of the following assumptions: A. Fixed cost will tend to remain constant or unchanged for the entire volume of production B. Variable cost remains constant per unit of output irrespective of the level of output C. There will not be any change in pricing policy due to change in volume, competition, etc. D. Operating efficiency of the firm may increase or decrease Choose the correct answer from the options given below:

ক

A and B only

খ

A, B and D only

গ

A, B, C and D

ঘ

A, B, and C only

Which two of the following statements are correct? a) In the short - run, Δ TFC = 0, therefore Δ TC = Δ TVC b) If decrease in AFC < increase in AVC, then AC decreases c) If decrease in AFC = increase in AVC, AC remains constant d) If decreases in AFC > increase in AVC, then AC increases Choose the correct answer from the options given below

ক

a) and c)

খ

b) and c)

গ

b) and d)

ঘ

a) and d)

Higher Study | Business Economics | Theory of cost

Under which of the following situations, economies of scale exists to the potential and persists?

In a perfectly competitive market, a firm in the long run operates at the level of output where :

Assertion A): At times, a business may face a situation where it has to shut down its operations. Reason R): If the revenue is less than its variable cost, the operation should be closed down. In the context of the above two statements, which one of the following codes is correct?

Which of the following are the methods of determining cost behaviour? a) High and low point method b) Least square regression method c) Accounting or analytical approach d) Non - parametric method Choose the correct answer from the options given below