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CUET Economics 2025 PYQs2 June Shift 1. Free, no login required.

Micro

past year questions, CUET Economics 2025 2 June Shift 1

Forms of Market

past year questions, Micro, CUET Economics 2025 2 June Shift 1

Medium

What is the shape of Average Revenue (AR) curve under perfect competition?

Solution

✅ Correct Option: 1

Option 1: Horizontal straight line -> Under perfect competition, firms are price takers and face a constant market price, making AR curve horizontal.

Option 2: Vertical straight line -> This would indicate infinite price changes at same quantity, which doesn't represent AR behavior.

Option 3: Rectangular hyperbola -> This shape represents unit elastic demand, not the AR curve under perfect competition.

Option 4: Downward to the right -> This represents AR curve under imperfect competition (monopoly), not perfect competition.

Hence, Option 1: Horizontal straight line -> Under perfect competition, a firm is a price taker and cannot influence the market price. Since Average Revenue (AR) equals Price, and price remains constant at all output levels for a perfectly competitive firm, the AR curve is a horizontal straight line parallel to the X-axis at the level of the prevailing market price. This also means AR = MR = Price under perfect competition. -> correct

Related questions:

2025: 14 May Shift 1

In the perfectly competitive market, if 10 packets of bread are sold at the price of Rs. 25 per packet, what will be the total revenue of a bread manufacturer?

  1. Rs. 25
  2. Rs. 250
  3. Rs. 0.4
  4. Rs. 2.5

2025: 28 May Shift 1

Arrange the following money supply measures in chronological order.

(A) Excess supply will prevail in the economy.

(B) The tendency of prices to change to restore equilibrium.

(C) Suppose market supply is greater than market demand at a given price.

(D) Hence, the market is not in equilibrium.

Choose the correct answer from the options given below:

2025: 28 May Shift 1

Match List-I with List-II

List-IList-II
(A) Upper limit on price of goods & services(I) Leads to excess supply.
(B) Free entry and exit(II) Equilibrium price = min AC of the firms.
(C) Marginal revenue product of labor (MRP_L)(III) Leads to excess demand.
(D) Lower limit on price of goods & services(IV) MR x MP_L.

Choose the correct answer from the options given below:

  1. (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
  2. (A) - (III), (B) - (II), (C) - (IV), (D) - (I)
  3. (A) - (IV), (B) - (III), (C) - (II), (D) - (I)
  4. (A) - (IV), (B) - (III), (C) - (I), (D) - (II)

2025: 3 June Shift 1

In the context of perfect competition, which one of the following is not correct?

2026: 12 May Shift 1

Choose the correct options from the following in respect of Break-even point(BEP) of a firm-

(A) BEP is a point of minimum AVC where the SMC curve cuts the AVC curve.

(B) BEP is a point on the supply curve at which a firm earns only normal profit.

(C) BEP is possible both in long run and short run.

(D) BEP is the point of minimum average cost at which the supply curve cuts the LRAC curve.

Choose the correct answer from the options given below:

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:

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