Practice Profit Maximisation - 4.3 | 4. The Theory of the Firm under Perfect Competition | CBSE 12 Introductory Microeconomics
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4.3 - Profit Maximisation

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define profit in terms of total revenue and total cost.

💡 Hint: What do we subtract from revenue to find profit?

Question 2

Easy

What does MC stand for in profit maximization?

💡 Hint: Think about what cost refers to an additional unit.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does profit maximization involve?

  • Minimizing costs
  • Maximizing the difference between TR and TC
  • Maximizing output

💡 Hint: Consider what is being increased to achieve profit.

Question 2

True or False: In the long run, a firm can sustain operations if the price is less than average cost.

  • True
  • False

💡 Hint: Think about business sustainability over time.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

If a firm has a total cost of Rs 100,000 producing 500 items and has a marginal cost of Rs 200 for the next item but is currently selling each item for Rs 250, should it increase production?

💡 Hint: Think about whether the selling price covers the marginal cost.

Question 2

Consider a firm with fixed costs of Rs 30,000 and variable costs dependent on output. Discuss the impact of an increased price in a competitive market and how it will influence the firm’s decision-making.

💡 Hint: Consider how price changes affect cost recovery.

Challenge and get performance evaluation