In the short run, a firm that is operating at a loss (where the revenue is less that the total cost or the price is less than the unit cost) must decide to operate or temporarily shutdown. It will shutdown if the sale of the goods or services produced cannot even cover the variable costs of production.

Correct Option: A

In the short run, a firm that is operating at a loss (where the revenue is less that the total cost or the price is less than the unit cost) must decide to operate or temporarily shutdown. It will shutdown if the sale of the goods or services produced cannot even cover the variable costs of production.

Complete market information is one of the main features of Perfect Competition. This condition implies close contact between buyers and sellers. Both of them possess complete knowledge about the prices at which goods are being bought and sold, and the prices at which others are prepared to buy or sell.

Correct Option: A

Complete market information is one of the main features of Perfect Competition. This condition implies close contact between buyers and sellers. Both of them possess complete knowledge about the prices at which goods are being bought and sold, and the prices at which others are prepared to buy or sell.

In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers’ capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.

Correct Option: A

In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers’ capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.

In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.

Correct Option: A

In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.

The classical economists were of the opinion that – the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.

Correct Option: A

The classical economists were of the opinion that – the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.