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CUET Economics 2025 PYQs29 May Shift 2. Free, no login required.

Micro

past year questions, CUET Economics 2025 29 May Shift 2

Forms of Market

past year questions, Micro, CUET Economics 2025 29 May Shift 2

Easy

The demand curve that a firm faces in a perfectly competitive market is...........

Solution

✅ Correct Option: 4

Option 1 -> More elastic.

Not the most precise description; while the demand is highly elastic, it is actually perfectly elastic.

Option 2 -> Less elastic.

Incorrect; the demand faced by a firm in perfect competition is highly elastic, not less elastic.

Option 3 -> Perfectly inelastic.

Incorrect; a perfectly inelastic demand curve would be vertical, meaning quantity doesn't change with price.

Option 4 -> Perfectly elastic.

Correct; the firm faces a horizontal demand curve at the market price.

Hence, Option 4: Perfectly elastic -> In a perfectly competitive market, an individual firm is a price taker and faces a perfectly elastic (horizontal) demand curve at the market-determined price. This means the firm can sell any quantity at the prevailing market price, but if it raises its price even slightly above the market price, it will lose all customers to competitors selling identical products. The firm has no market power to influence price, resulting in infinite price elasticity of demand at the individual firm level. -> correct

Related questions:

2025: 3 June Shift 1

Which of the following is true about the relationship between Total Revenue (TR) and Marginal Revenue (MR) in a perfectly competitive market?

(A) Total Revenue will increase at a constant rate.

(B) Marginal Revenue is more than Average Revenue.

(C) Marginal Revenue remains constant throughout.

(D) Marginal Revenue is equal to Average Revenue.

Choose the correct answer from the options given b-elow:

2025: 16 May Shift 1

Which of the following is NOT a condition for profit maximization of a perfectly competitive firm in the short run?

2026: 20 May Shift 1

Choose the correct option(s) with respect to free entry and exit assumption of a perfectly competitive market.

(A) At equilibrium, no firm earns supernormal profit.

(B) As new firms enter the market, the supply curve shifts leftward.

(C) Equilibrium price will be equal to the minimum average cost.

(D) At equilibrium, no firm incurs losses by remaining in production.

Choose the correct answer from the options given below:

2025: 21 May Shift 1

In perfectly competitive market, the demand curve of a firm is?

2026: 13 May Shift 2

Match List-I with List-II

List-IList-II
(A) Price-takers(I) Break-even point.
(B) Price less than minimum point of AVC curve(II) Normal profit.
(C) A firm earns normal profit(III) Perfectly Competitive Market.
(D) A firm covers the explicit costs and opportunity costs(IV) Shut down point.

Choose the correct answer from the options given below:

2025: 27 May Shift 2

Public goods, as distinct from private goods, are collectively consumed. Two important features of public goods are:

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