The Theory Of The Firm Under Perfect Competition - Class 11 Commerce Economics - Extra Questions

Define elasticity of supply.

What is a 'supply schedule'? Give one example.

Prepare an imaginary supply schedule and draw an individual supply curve based on it.

Construct an imaginary individual supply schedule.

Draw and briefly explain a perfectly elastic supply curve.

Explain the various methods of measuring price elasticity of supply.

When the price of a commodity changes from Rs. $$4$$ per unit to Rs. $$5$$ unit, its market supply rises from $$100$$ units to $$120$$ units. Calculate price elasticity of supply. Is supply elastic? Give reason.

Define opportunity cost.

Define total opportunity cost.

When is the supply of a commodity called 'elastic'?

What is meant by supply schedule? 

Supply is more responsive to price in the long period compared to short period. Comment.

Define supply curve.

Define normal profits.

What is the supply curve of a firm in the long run?

Define sub-normal profits.

A firm may undertake production even in a state of losses. Comment.

Normal profit is a part of total cost. Explain.

Explain the concepts of break-even point and shut-down point, using a suitable diagram.

Define perfect competition.

Should production be discontinued by the firm in the short-run when $$AR = AVC$$?

Shut-down point means shutting down of the firm. Discuss.

Will a firm continue to produce even if it is incurring losses under perfect competition? Explain.

What is the difference between 'perfectly competitive market structure' and 'competitive market structure under oligopoly'? Which of these two (market structures), in your opinion is more suitable for the growth and development of the Indian economy?

Equilibrium price never changes in a situation of perfectly elastic supply, no matter what the demand is. Is it true?

Rahul have three options of a job, offering him a salary of $$Rs.20,000, \,Rs. 25,000$$ and $$Rs. 30,000$$ respectively. What is Rahul's opportunity cost?

Your friend's and your birthday is on the same day. On the occasion, both of you exchange gifts. Each of you spends $$Rs. 400$$. You spend this amount by borrowing for which you are to pay $$Rs. 20$$ as interest. What is your opportunity cost of celebrating birthday?

Answer briefly each of the following questions.
How is elasticity of supply different from supply of commodity?

When price of a commodity falls from $$Rs. 12$$ per unit to $$Rs. 9$$ per unit, the producer supplies $$75$$ per cent less output. Calculate price elasticity of supply.

Fill in the blank of the following.
Competitive behaviour and Competitive market structure are in general ___________ related.

What is market supply?

What is the market supply curve?

Answer the following question in $$4$$ sentences.
Give the meaning of price elasticity of supply and write its formula.

How natural factors affect the supply?

What is the percentage method of elasticity of supply?

What do you mean by unitary elastic supply?

What do you mean by perfectly inelastic supply?

What do you mean by a perfectly elastic supply?

What is the point method of elasticity of supply?

What do you mean by inelastic supply?

What do you mean by elastic supply?

What is the factor mobility in the elasticity of supply?

What are the determinants of elasticity of supply?

What is Risk Taking in the Elasticity of supply?

What exactly do you mean when you say "break even point"?

What exactly do you mean when you say "shut down point"?

Explain two reasons why the supply of a product may be price inelastic?

Explain the following term with the help of a diagram: Explain different types of elasticity of supply.

Write note on perfect competition.

What is the definition of perfect competition market?

A seller rises the supply of a good from 100 units to 200 units at a price of Rs 10 per unit. What will be the elasticity of supply?

The Government of your State is planning to construct a by-pass around a very busy market town, the new road will run through wetlands bordering a local river, where a wide range of different creatures live. So the environmentalists are against the project. The educationists and the other, wanted the money to be used to built an Engineering College and to improve the existing poor health facilities. The Government decide to go ahead with road construction. What is the opportunity cost in this case?

a. i. What is the impact of the behaviour of cost of production on elasticity of supply?
ii. Draw and explain the following degrees of elasticity of supply:
$$\varepsilon p = \infty $$
$$\varepsilon p = 0 $$
$$\varepsilon p >1 $$
b. What are commercial banks? Explain clearly three methods adopted by commercial banks to borrow money from the public.

Given a consumption curve, outline the steps required to be taken in deriving a saving curve from it. Use diagram.

On the basis of the supply schedule shown in the table below, prepare a Market Supply Schedule :
Price (Rs. per unit)
Individual Firms
Market Supply Schedule (Units)

A (Units)B (Units)C (Units)

Indicate the degree of elasticity of a supply curve parallel to the X-axis.

Discuss the concept of of opportunity cost with an example.

Class 11 Commerce Economics Extra Questions