If a firm in a perfectly competitive market tries to charge a price even slightly above the ruling market price, it will sell nothing. The best explanation for this is:

Products of all firms are homogeneous, so buyers shift entirely to other sellers offering the market price

The firm's output is too large a share of the market to be sold at a higher price

The government legally fixes the price in a perfectly competitive market

Other firms will immediately raise their prices too, eliminating its advantage

A perfectly competitive market has only two firms. At a price of ₹10, firm 1 supplies 20 units and firm 2 supplies 30 units. The market supply at the price of ₹10 is:

50 units, obtained by adding the quantities supplied by both firms at that price

30 units, the supply of the larger firm only

It cannot be found without adding the two firms' prices

25 units, the average of the two firms' supplies

A perfectly competitive firm is producing at a point where price equals the minimum of its average cost curve. Which of the following is true at this point?

The firm is at the break-even point, earning zero super-normal profit but normal profit

The firm is at the shut-down point and should stop production

The firm is incurring losses equal to its fixed cost

The firm is earning super-normal profit, since all costs are covered

Chapter testEconomicsIncluded in the seriesTest 19 of 38

CBSE Class 12 Commerce Economics · Ch 4: The Theory of the Firm under Perfect Competition

CBSE Class 12 Commerce Economics · Ch 4: The Theory of the Firm under Perfect Competition is an online chapter test in the CBSE Class 12 Commerce pattern, covering The Theory of the Firm under Perfect Competition. Attempt it on SeatBeat with a timer like the real exam, then see a detailed solution for every question and your score and weak-topic analysis.

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Topics in this test

Topic	Subject	Questions
The Theory of the Firm under Perfect Competition	Economics	30

Difficulty: 7 medium · 23 hard

The Theory of the Firm under Perfect Competition MCQ questions with answers

The first 3 of 30 questions. Unlock the series for the rest, each with a solution.

Q1. If a firm in a perfectly competitive market tries to charge a price even slightly above the ruling market price, it will sell nothing. The best explanation for this is:
यदि पूर्ण प्रतियोगी बाज़ार में कोई फर्म प्रचलित बाज़ार कीमत से थोड़ी-सी भी अधिक कीमत वसूलने का प्रयास करती है, तो वह कुछ भी नहीं बेच पाएगी। इसकी सबसे अच्छी व्याख्या है:
- A. The firm's output is too large a share of the market to be sold at a higher price / फर्म का उत्पादन बाज़ार का इतना बड़ा हिस्सा है कि उसे ऊँची कीमत पर बेचा नहीं जा सकता
- B. The government legally fixes the price in a perfectly competitive market / पूर्ण प्रतियोगी बाज़ार में सरकार कानूनी रूप से कीमत निर्धारित करती है
- C. Other firms will immediately raise their prices too, eliminating its advantage / अन्य फर्में भी तुरंत अपनी कीमतें बढ़ा देंगी, जिससे उसका लाभ समाप्त हो जाएगा
- D. Products of all firms are homogeneous, so buyers shift entirely to other sellers offering the market price / सभी फर्मों के उत्पाद समरूप हैं, अतः क्रेता पूरी तरह बाज़ार कीमत पर बेचने वाले अन्य विक्रेताओं की ओर चले जाते हैं
Solution
Under perfect competition all firms sell a homogeneous product and buyers have full information, so no buyer will pay more when the identical good is available at the market price elsewhere. This is why each firm must act as a price taker.
पूर्ण प्रतियोगिता में सभी फर्में समरूप वस्तु बेचती हैं और क्रेताओं को पूर्ण जानकारी होती है, अतः कोई भी क्रेता अधिक कीमत नहीं देगा जब वही वस्तु बाज़ार कीमत पर अन्यत्र उपलब्ध है। यही कारण है कि प्रत्येक फर्म को कीमत-स्वीकारक के रूप में कार्य करना पड़ता है।
Q2. A perfectly competitive market has only two firms. At a price of ₹10, firm 1 supplies 20 units and firm 2 supplies 30 units. The market supply at the price of ₹10 is:
एक पूर्ण प्रतियोगी बाज़ार में केवल दो फर्में हैं। ₹10 की कीमत पर फर्म 1, 20 इकाइयों की पूर्ति करती है और फर्म 2, 30 इकाइयों की पूर्ति करती है। ₹10 की कीमत पर बाज़ार पूर्ति है:
- A. 30 units, the supply of the larger firm only / 30 इकाइयाँ, केवल बड़ी फर्म की पूर्ति
- B. It cannot be found without adding the two firms' prices / दोनों फर्मों की कीमतों को जोड़े बिना इसे ज्ञात नहीं किया जा सकता
- C. 50 units, obtained by adding the quantities supplied by both firms at that price / 50 इकाइयाँ, जो उस कीमत पर दोनों फर्मों द्वारा पूर्ति की गई मात्राओं को जोड़कर प्राप्त होती हैं
- D. 25 units, the average of the two firms' supplies / 25 इकाइयाँ, दोनों फर्मों की पूर्तियों का औसत
Solution
The market supply curve is obtained by adding up the quantities supplied by all firms at each price. So at ₹10, market supply $= 20 + 30 = 50$ units.
बाज़ार पूर्ति वक्र प्रत्येक कीमत पर सभी फर्मों द्वारा पूर्ति की गई मात्राओं को जोड़कर प्राप्त किया जाता है। अतः ₹10 पर बाज़ार पूर्ति $= 20 + 30 = 50$ इकाइयाँ।
Q3. A perfectly competitive firm is producing at a point where price equals the minimum of its average cost curve. Which of the following is true at this point?
एक पूर्ण प्रतियोगी फर्म उस बिंदु पर उत्पादन कर रही है जहाँ कीमत उसके औसत लागत वक्र के न्यूनतम के बराबर है। इस बिंदु पर निम्नलिखित में से कौन-सा कथन सत्य है?
- A. The firm is at the shut-down point and should stop production / फर्म उत्पादन-बंदी बिंदु पर है और उसे उत्पादन रोक देना चाहिए
- B. The firm is at the break-even point, earning zero super-normal profit but normal profit / फर्म समविच्छेद बिंदु पर है, जहाँ वह शून्य असामान्य लाभ परंतु सामान्य लाभ अर्जित कर रही है
- C. The firm is incurring losses equal to its fixed cost / फर्म को अपनी स्थिर लागत के बराबर हानि हो रही है
- D. The firm is earning super-normal profit, since all costs are covered / फर्म असामान्य लाभ अर्जित कर रही है, क्योंकि सभी लागतें पूरी हो चुकी हैं
Solution
At the break-even point $P = \text{minimum } AC$, so total revenue exactly equals total cost and super-normal profit is zero. The firm still earns normal profit because normal profit is included in cost.
समविच्छेद बिंदु पर $P = \text{न्यूनतम } AC$ होता है, अतः कुल आगम ठीक कुल लागत के बराबर होता है और असामान्य लाभ शून्य होता है। फर्म फिर भी सामान्य लाभ अर्जित करती है, क्योंकि सामान्य लाभ लागत में शामिल होता है।

Frequently asked questions

How many questions are in the CBSE Class 12 Commerce Economics · Ch 4: The Theory of the Firm under Perfect Competition?

30 questions for 30 marks, to be answered in 20 minutes.

Is there negative marking in the CBSE Class 12 Commerce Economics · Ch 4: The Theory of the Firm under Perfect Competition?

No — wrong answers are not penalised in this test.

Which topics does the CBSE Class 12 Commerce Economics · Ch 4: The Theory of the Firm under Perfect Competition cover?

The Theory of the Firm under Perfect Competition (30 questions).

Is the CBSE Class 12 Commerce Economics · Ch 4: The Theory of the Firm under Perfect Competition free?

It is part of the CBSE Class 12 Commerce Test Series 2027 — Chapter-wise + Full Tests (38 tests, ₹199). You can first try Accountancy · Ch 1: Accounting for Partnership: Basic Concepts for free.

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