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Free CIMAPRA17-BA1-1 Exam Braindumps
BA1 - Fundamentals of Business Economics Questions 131–135 (page: 28)

Updated On: 9-Feb-2026
Page 28 of 95
PDF with 468 Questions

Which ONE of the following statements does NOT describe a position of profit maximization?

  1. MC=MR
  2. Price elasticity of demand is less than 1
  3. Point of greatest excess of total revenue over total costs
  4. Total cost curve has the same slope as the total revenue curve

Answer(s): B



A profit-maximizing firm will cut the product's price to increase profits if

  1. Demand is elastic
  2. Unit costs fall
  3. The demand curve shifts rightwards
  4. Marginal revenue is greater than marginal cost

Answer(s): D



All of the following statements about a firms total revenue curve are true except which ONE?

  1. Because the price of a product falls as more is supplied to the market the curve is not a straight line
  2. Price elasticity of demand for the product = 1 at the highest point of the curve
  3. If price of the product rose the curve would pivot upwards
  4. The curve would be a horizontal straight line if demand for the product were perfectly price elastic

Answer(s): D



Which ONE of the following statements about profit is true?

  1. Normal profit will rise if the cost of production is falling as output increases
  2. Profit per unit is equal to the difference between average revenue and average total cost
  3. The point of profit maximization is always where average costs are lowest
  4. A rise in output will always raise profits provided total revenue is rising

Answer(s): B



The average price of recorded music CDs has been declining for several years.
Which of the following changes in market conditions would NOT be a cause of this?

  1. Availability of new cheaper substitutes such as downloads
  2. Increased competition due to entry to the market by supermarket and internet sellers of CDs
  3. Decline in the number of CD shops due to bankruptcy and closure
  4. Growth in popularity of alternative goods such as mobile phones and video games

Answer(s): C



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