Individual Demand Curve

Q. Which is the optimum or most preferred bundle?

1. None of the above
2. The one where the budget line is tangent to the indifference curve
3. The one where the budget line intersects the indifference curve
4. The one below the budget line

Q. A firm is said to be of optimum size when __________________.

1. marginal cost is equal to marginal revenue
2. the firm is maximizing its profits
3. long run marginal cost is at a minimum
4. long run average total cost is at a minimum

Q. The kinked demand curve is used to rationalise __________.

1. price rigidity
2. price leadership
3. collusion
4. price competition