Producer Behaviour and Supply (CBSE Class-12 Economics): Questions 96 - 105 of 175

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Question number: 96

» Producer Behaviour and Supply » Production Function

Essay Question▾

Describe in Detail

Explain what happens to losses in the long run if the firms are free to leave the industry.

Explanation

In the long run if the firms are free to leave the industry than that individual firm earns only normal profits and zero profits for economicy. When a firm exits it operates at the point where minimum of long run average cost curve is contiguous price line. Firms don’t earn… (43 more words) …

Question number: 97

» Producer Behaviour and Supply » Production Function

Essay Question▾

Describe in Detail

Explain what happens to the profits in the long run if the firms are free to enter the industry.

Explanation

In the long run if the firms are free to enter the industry it will earn some profit but it will be zero profits in economiy. Entry of individual firm is operated at point where minimum of long run average cost curve is as a priceline.

In such situation firm… (50 more words) …

Question number: 98

» Producer Behaviour and Supply » Supply » Supply Schedule

Essay Question▾

Describe in Detail

Distinguish between (i) elastic and inelastic supply and (ii) perfectly elastic and perfectly inelastic supply.

Explanation

Characteristics

Elastic Supply

Inelastic Supply

Definition

Elastic supply means increase in price causes a greater percent increase in supply.

Inelastic supply. This means that an increase in price causes a less percent increase in supply. It has a price elasticity of supply of less than 1.

How many price elasticity?… (163 more words) …

Question number: 99

» Producer Behaviour and Supply » Supply » Supply Schedule

Short Answer Question▾

Write in Short

When exchange rate of foreign currency rises, its supply rises. How? Explain.

Question number: 100

» Producer Behaviour and Supply » Cost

Essay Question▾

Describe in Detail

Distinguish between average cost and marginal cost giving an example.

Explanation

Characteristics

average cost

marginal cost

Definition

average cost is the cost of producing amount of output divided by the cost per unit

When a firm increases its output by one unit, there is a change in the total cost of producing that commodity this change in cost is known as… (121 more words) …

Question number: 101

» Producer Behaviour and Supply » Cost

Essay Question▾

Describe in Detail

Average variable cost and Marginal Cost

Calculation of Marginal Cost and Average variable cost

Output (units)

Total Variable cost (Rs)

Average variable cost

Marginal cost

1

10

-

-

-

-

8

6

3

27

-

-

-

-

10

13

Explanation

Calculation Average variable cost and Marginal Cost

Calculation of Marginal Cost and Average variable cost

Output (units)

Total Variable Cost (Rs)

Average variable cost

Marginal Cost

1

10

10

10

2

16

8

6

3

27

9

11

4

40

10

13

In that sum find in first row find… (101 more words) …

Question number: 102

» Producer Behaviour and Supply » Supply » Supply Curve

Essay Question▾

Describe in Detail

What is the likely effect on the supply of good if a unit tax is imposed on that good? Explain.

Explanation

Price of input used in production and it shares negative relationship with supply of good. If input price decreases than cost of production get decreased so, producers increase the production of good with decrease in input prices and supply of good increase.

Decrease in price of inputs and supply curve

Decrease in Price of Inputs and Supply Curve… (30 more words) …

Question number: 103

» Producer Behaviour and Supply » Production Function

Essay Question▾

Describe in Detail

Explain “Returns to Scale” using numerical examples. Give reasons.

Explanation

When a producer changes all factors of production in a proportion. The proportional relationship between output and factor is known as returns to scale. When all inputs are increased in the same proportion and three possibilities:

Revenue receipts does not create responsibility and reduction in assets. Receipts from tax revenue… (13 more words) …

Question number: 104

» Producer Behaviour and Supply » Cost

Essay Question▾

Describe in Detail

Distinguish between fixed cost and variable cost giving examples an example.

Explanation

Characteristics

Fixed cost

Variable cost

Definition

Fixed cost means it is indirect cost it is not dependent on level of goods or services.

Variable cost means cost of labor, material and change in volume of production.

Behavior

It is constant for given time period

It changes with change in the… (8 more words) …

Question number: 105

» Producer Behaviour and Supply » Revenue

Essay Question▾

Describe in Detail

Complete the following table:

Price ( Rs. )

Output (units)

Total Revenue ( Rs. )

Marginal Revenue (Rs)

10

1

-

-

-

2

14

-

-

3

-

1

-

4

12

-

Explanation

Price ( Rs. )

Output (units)

Total Revenue ( Rs. )

Marginal Revenue (Rs)

10

1

10

-

7

2

14

4 (14 - 10)

5

3

15

1 (15 - 14)

3

4

12

-3 (12 - 15)

Here, Total revenue = price × Output

Marginal Revenue = T… (33 more words) …

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