# JNU Questions

40 messages
12
Open this post in threaded view
|

## JNU Questions

 Someone plz match ur answers with me for the following questions... Q1) A fair dice has given the number 6 on 5 consecutive throws. What is the probability that the next throw will also give the sam no 6? a) 1/30 b) 1/6 c) 5/6 d) None of the above Q2) A monopolist faces a demand curve q(p)=1/p. He incurs a cost of Rs 3 per unit of output produced. There is no fixed cost. His optimal output choice is- a) 2 b) 3 c) 0 d) No such optimal output exists Q3) If demand facing a monopolit is measured in kgs & the price is measured in Rs/kg, the DW loss due to the monopolist charging a profit maximizing price is measured; a) Ln Rs b) Ln kgs c) Ln Rs/kg d) As a pure no Q4) The nature of the LR =m for a monopolistically  competitive firm differs from that of a perfectly competitive firm bcoz; a) The presence of supernormal profits b) The presence of excess capacity c) The quality b/w MR & MC’ d) None of the above Q5) A monopolist faces a demand curve with unit price elasticity of demand. For such a monopolist if MC are +ve; a) Profit maximizing output dsn’t exist b) Profit maximizing output is where MR=MC & MR is decreasing c) Profit maximizing output is where AR=MR & AR is decreasing d) None of the above Q6) Suppose the monopolist has the C(q)=10q. Inverse demand fn is p(q)=20/q. What is the monopolist’s profit maximizing q? a) The problem dsn’t have a soln b) 1 c) Infinity d) 0 ANSWERS 1) b 2) d 3) d 4) a 5) a (if we consider the case of rectangular hyperbola with ed=1..) 6) a
Open this post in threaded view
|

## Re: JNU Questions

 6b
Open this post in threaded view
|

## Re: JNU Questions

 how is 6th answer- b? i got no solution.
Open this post in threaded view
|

## Re: JNU Questions

 I am also getting no solution. Plz confirm Vandita for this one & the rest..
Open this post in threaded view
|

## Re: JNU Questions

 In reply to this post by Xiang also 4b 5b in q6, p*q=20 which is fixed. and if i produce only one commodity then, cost will be 10q=10*1=10 hence maximum profit will be if i produce 1 quantity.. TR-TC= 20-10=10
Open this post in threaded view
|

## Re: JNU Questions

 In reply to this post by RHIDIMA Rhidima, for this question: Q5) A monopolist faces a demand curve with unit price elasticity of demand. For such a monopolist if MC are +ve; did u use the formula- MR=p(1-1/e) which is 0 and hence the option? Please clarify. Thanks
Open this post in threaded view
|

## Re: JNU Questions

 yes i did use the same notion. But i am not sure. And the explaination for Q6(given by Vandita), i dn't think so it's correct..
Open this post in threaded view
|

## Re: JNU Questions

 Ya i am not convinced :( others, Please confirm !
Open this post in threaded view
|

## Re: JNU Questions

Open this post in threaded view
|

## Re: JNU Questions

 @vanditha, I agree with you on the other answers  but i dont seem to understand the concept- 6b :(
Open this post in threaded view
|

## Re: JNU Questions

 In reply to this post by RHIDIMA 6) a TR is always fixed . So, the only way in which monopolist can maximize his profits is by reducing his cost =10q i.e by reducing the quantity And if he produces zero units then, profit will be zero. Hence,the problem dsn’t have a solution. 5)a Same reasoning as above. :)
Open this post in threaded view
|

## Re: JNU Questions

 In reply to this post by RHIDIMA 6 is a only coa mr is zero so no at no output is producd.....
Open this post in threaded view
|

## Re: JNU Questions

 In reply to this post by Xiang see, for such a dd curve wher revenue is fixed..and cost function depends on o/t produced there to obtain the profit max level of o/t, u hav to go by trial methods, see here cost fn is 10q. hence if i produce q=2 then cost = 10*2=20 which is same as revenue(fixed in question) so at q=2 profit = tr-tc= 20-20=0, again if q>2 say q=3 is produced then profit is 20-30= -10 hence not possible. only at q=1 profit is maximized.. ur take agree or disagree..
Open this post in threaded view
|

## Re: JNU Questions

 Supose, q=1/2. His profits = 20-10*0.5 = 15 > profit at q=1. So, definitely q=1 is not profit maximising output. Ur take..agree or disagree? :)
Open this post in threaded view
|

## Re: JNU Questions

 Duck, plz verify answers to Q2, 3 & 4..
Open this post in threaded view
|

## Re: JNU Questions

 In reply to this post by duck but why quantity in fraction?? is it practically feasible for a firm to produce say half or one fourth or for that matter .001 units of something, we have to talk in discrete terms dnt we? and moreover if profits for such dd fns are always 0 y such dd fucnts exist for that matter? if we would have fixed cost of production then what wud be ur response?
Open this post in threaded view
|

## Re: JNU Questions

 Firstly, its nowhere mentioned in the question that good produced needs to be an integer! Existence of such demand in real life..i cannot comment on that. If there is fixed cost (lets say 10) then Profit will always be equal to 20-10 = 10. So, no matter what amount he produces, he'll always get 10rs. :)
Open this post in threaded view
|

## Re: JNU Questions

 yes i agree its not mentioned about q being integer, but pls tell me do we say dat quantity produced by a firm is say 32.6, we make it discrete dnt we?
Open this post in threaded view
|

## Re: JNU Questions

 In reply to this post by vandita24x7 hey vandita I dont think the answer can be (B) for ques 5...as per the formula mr=ar(1-1/e)...if e is unit then mr should be o and so we cannot obtain any profit maximizing output...ur thoughts??