{"id":90334,"date":"2025-06-01T10:26:33","date_gmt":"2025-06-01T10:26:33","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=90334"},"modified":"2025-06-01T10:26:33","modified_gmt":"2025-06-01T10:26:33","slug":"which-one-of-the-following-is-not-correct-3","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/","title":{"rendered":"Which one of the following is NOT correct ?"},"content":{"rendered":"

Which one of the following is NOT correct ?<\/p>\n

[amp_mcq option1=”The Average Revenue and Marginal Revenue curves of a perfectly competitive firm are perfectly elastic” option2=”The Marginal Revenue curve of the monopoly firm is above its Average Revenue curve” option3=”In the long-run, a competitive firm earns only normal profits” option4=”In equilibrium, the Marginal Cost Curve of the monopoly firm may be rising, falling or constant” correct=”option2″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC CAPF – 2019<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nFor a monopoly firm, the demand curve it faces is the market demand curve, which is typically downward sloping. The Average Revenue (AR) curve is identical to the demand curve. Because the monopolist must lower the price on all units sold to sell an additional unit, the Marginal Revenue (MR) from selling that extra unit is less than the price (AR). Therefore, the MR curve for a monopolist lies *below* the AR curve, not above it.
\n<\/section>\n
\n– Perfectly competitive firms are price takers; their demand curve is horizontal (perfectly elastic), and AR = MR.
\n– Monopolists are price makers; their demand curve is downward sloping.
\n– For a downward-sloping demand curve, MR is always less than AR (for Q > 0) and lies below the AR curve.
\n– In the long run, perfect competition allows for free entry\/exit, leading to normal profits.
\n– A monopolist maximizes profit where MR=MC, and the MC curve can have various slopes in the relevant range.
\n<\/section>\n
\nStatement A is correct for a perfectly competitive firm’s individual demand curve. Statement C is correct for perfect competition in the long run. Statement D is correct; a monopolist’s MC curve can be rising, falling, or constant where it intersects MR, as long as the second-order condition (MC cuts MR from below or MR is falling faster than MC) for profit maximization is met.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Which one of the following is NOT correct ? [amp_mcq option1=”The Average Revenue and Marginal Revenue curves of a perfectly competitive firm are perfectly elastic” option2=”The Marginal Revenue curve of the monopoly firm is above its Average Revenue curve” option3=”In the long-run, a competitive firm earns only normal profits” option4=”In equilibrium, the Marginal Cost Curve … <\/p>\n

Detailed SolutionWhich one of the following is NOT correct ?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1085],"tags":[1119,1120,1261],"class_list":["post-90334","post","type-post","status-publish","format-standard","hentry","category-upsc-capf","tag-1119","tag-economic-development","tag-nature-of-indian-economy","no-featured-image-padding"],"yoast_head":"\nWhich one of the following is NOT correct ?<\/title>\n<meta name=\"description\" content=\"For a monopoly firm, the demand curve it faces is the market demand curve, which is typically downward sloping. The Average Revenue (AR) curve is identical to the demand curve. Because the monopolist must lower the price on all units sold to sell an additional unit, the Marginal Revenue (MR) from selling that extra unit is less than the price (AR). Therefore, the MR curve for a monopolist lies *below* the AR curve, not above it. - Perfectly competitive firms are price takers; their demand curve is horizontal (perfectly elastic), and AR = MR. - Monopolists are price makers; their demand curve is downward sloping. - For a downward-sloping demand curve, MR is always less than AR (for Q > 0) and lies below the AR curve. - In the long run, perfect competition allows for free entry\/exit, leading to normal profits. - A monopolist maximizes profit where MR=MC, and the MC curve can have various slopes in the relevant range.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which one of the following is NOT correct ?\" \/>\n<meta property=\"og:description\" content=\"For a monopoly firm, the demand curve it faces is the market demand curve, which is typically downward sloping. The Average Revenue (AR) curve is identical to the demand curve. Because the monopolist must lower the price on all units sold to sell an additional unit, the Marginal Revenue (MR) from selling that extra unit is less than the price (AR). Therefore, the MR curve for a monopolist lies *below* the AR curve, not above it. - Perfectly competitive firms are price takers; their demand curve is horizontal (perfectly elastic), and AR = MR. - Monopolists are price makers; their demand curve is downward sloping. - For a downward-sloping demand curve, MR is always less than AR (for Q > 0) and lies below the AR curve. - In the long run, perfect competition allows for free entry\/exit, leading to normal profits. - A monopolist maximizes profit where MR=MC, and the MC curve can have various slopes in the relevant range.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:26:33+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Which one of the following is NOT correct ?","description":"For a monopoly firm, the demand curve it faces is the market demand curve, which is typically downward sloping. 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Therefore, the MR curve for a monopolist lies *below* the AR curve, not above it. - Perfectly competitive firms are price takers; their demand curve is horizontal (perfectly elastic), and AR = MR. - Monopolists are price makers; their demand curve is downward sloping. - For a downward-sloping demand curve, MR is always less than AR (for Q > 0) and lies below the AR curve. - In the long run, perfect competition allows for free entry\/exit, leading to normal profits. - A monopolist maximizes profit where MR=MC, and the MC curve can have various slopes in the relevant range.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/","og_locale":"en_US","og_type":"article","og_title":"Which one of the following is NOT correct ?","og_description":"For a monopoly firm, the demand curve it faces is the market demand curve, which is typically downward sloping. 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Therefore, the MR curve for a monopolist lies *below* the AR curve, not above it. - Perfectly competitive firms are price takers; their demand curve is horizontal (perfectly elastic), and AR = MR. - Monopolists are price makers; their demand curve is downward sloping. - For a downward-sloping demand curve, MR is always less than AR (for Q > 0) and lies below the AR curve. - In the long run, perfect competition allows for free entry\/exit, leading to normal profits. - A monopolist maximizes profit where MR=MC, and the MC curve can have various slopes in the relevant range.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T10:26:33+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/","url":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/","name":"Which one of the following is NOT correct ?","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T10:26:33+00:00","dateModified":"2025-06-01T10:26:33+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"For a monopoly firm, the demand curve it faces is the market demand curve, which is typically downward sloping. 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Therefore, the MR curve for a monopolist lies *below* the AR curve, not above it. - Perfectly competitive firms are price takers; their demand curve is horizontal (perfectly elastic), and AR = MR. - Monopolists are price makers; their demand curve is downward sloping. - For a downward-sloping demand curve, MR is always less than AR (for Q > 0) and lies below the AR curve. - In the long run, perfect competition allows for free entry\/exit, leading to normal profits. - A monopolist maximizes profit where MR=MC, and the MC curve can have various slopes in the relevant range.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-is-not-correct-3\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC CAPF","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-capf\/"},{"@type":"ListItem","position":3,"name":"Which one of the following is NOT correct ?"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/90334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=90334"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/90334\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=90334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=90334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=90334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}