CUET Economics 2025 14 May Shift 1 PYQs

Match List-I with List-II

List-I	List-II
(A) Perfect Competition	(I) A typical characteristic of perfect competition.
(B) Perfectly elastic demand curve	(II) An individual firm is a price taker.
(C) Degree of price control under perfect competition	(III) The firm can sell any amount of its output at the prevailing price.
(D) Freedom of entry and exit	(IV) No control over price.

Choose the correct answer from the options given below:

Under perfect competition if firms earn supernormal profits. Arrange following statements to arrive at the implication of free entry and exit of firms

(A) Market price fall in such a manner that firms will be earning normal profits only and thus no more firms will have incentive to enter the market.

(B) Some new firms will enter the market

(C) At the prevailing market price, each firm is earning supernormal profit.

(D) Demand remains unchanged but the market supply curve shifts rightward

Identify the incorrect statement regarding price flooring:

1. It causes excess demand, which often leads to the problem of black marketing.
2. Price floor is the minimum price of a commodity in the market as fixed by the government.
3. Often, the government fixes this price higher than the equilibrium market price of a commodity.
4. It ensures stability of income to the producers.