Micro

Forms of Market

Medium

Which of the following condition must be satisfied for profit maximization under perfect competition for the Short Run (SR) and for the Long Run (LR) respectively?

Where P = Price, AVC = Average variable cost, AFC = Average fixed cost, AC = Average cost.

In the Short Run $P \geq AC$ & In the Long Run $P \geq AVC$

In the Short Run $P \geq AVC$ & In the Long Run $P \geq AFC$

In the Short Run $P \geq AC$ & In the Long Run $P \geq AFC$

In the Short Run $P \geq AVC$ & In the Long Run $P \geq AC$

✅ Correct Option: 4

Under perfect competition a firm keeps producing in the short run as long as price covers average variable cost ( $P \geq AVC$ ), since fixed costs are sunk anyway. In the long run all costs are variable, so price must cover the full average cost ( $P \geq AC$ ) for the firm to stay in the market.

2026: 13 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Total Revenue (TR)	(I) TR /quantity (q)
(B) Average Revenue (AR)	(II) ΔTR/Δq
(C) Marginal Revenue (MR)	(III) TR-TC
(D) Profit (π)	(IV) price × quantity

Choose the correct answer from the options given below:

2025: 22 May Shift 1

Let us consider the example of a market consisting of identical farms producing the same quality of wheat. Suppose the market demand curve and the market supply curve for wheat are given by: qᵈ = 200 - p and qˢ = 120 + p. What is the equilibrium price?

2025: 22 May Shift 1

Perfect information implies that all buyers and all sellers are completely informed about the price, quality and other relevant details about the product, as well as the market. These features result in the single most distinguishing characteristic of perfect competition, that is...

2026: 11 May Shift 1

Which of the following condition is satisfied for a firm to maximise it's profit in the short run under perfect competition?

Where, P = Price, AC = Average cost, MC = Marginal Cost.

2025: 3 June Shift 1

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

2025: 13 May Shift 2

Price ceiling is one concept which provides safeguard to______

Which of the following condition must be satisfied for profit maximization under perfect competition for the Short Run (SR) and for the Long Run (LR) respectively? Where P = Price, AVC = Average variable cost, AFC = Average fixed cost, AC = Average cost.

Solution

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CUET Economics Past Year Questions (Topic-Wise)

Which of the following condition must be satisfied for profit maximization under perfect competition for the Short Run (SR) and for the Long Run (LR) respectively?

Where P = Price, AVC = Average variable cost, AFC = Average fixed cost, AC = Average cost.