CUET Economics 2026 21st May Shift 1 PYQs

Identify the correct sequence due to which firms under perfect competition earn normal profits in the long run.

(A) The firms are earning less than normal profit at the prevailing price.

(B) The profits of each firm will increase to the level of normal profit.

(C) No more firm will want to leave, since they will be earning normal profit here.

(D) Some firms will exit, which will lead to an increase in price.

Choose the correct answer from the options given below:

What would be the equilibrium number of firms in a market of identical firms, when market demand function $(Q_d)$, supply function of a single firm $(Q_s1)$ and equilibrium price (P) are given as

$Q_d = 180 - 2P$

$Q_{s1} = 15 + P$

$P = 15$

1. 5
2. 6
3. 8
4. 9

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: