Forms of Market and Price Determination Test - 1

After the point of MR=MC ,the MC starts rising thus reducing the profits. and when MR >MC, the producer can still produce more as cost is less than revenue. So at the point of MR = MC , his profits are maximised and he earns normal profits.

Irrespective of the angle that it makes, a straight line(upward sloping) supply curve passing through the origin will have elasticity of supply = 1

No matter what angle it makes, a straight line(upward sloping) supply curve , shooting from the origin always has elasticity of supply = 1(unitary )

When a new firm enters the market, the supply increases and supply curve shifts to the right. This creates an excess supply at the existing price. This leads to competition among the sellers, which reduces the price .

Since the firm is a price taker, the price is constant, so uniform prices prevail, because of which MR will also be constant at all levels of output. So MR is a straight horizontal line in Perfect competition.

As after MC=MR, cost will increase and so TR-TVC, i.e. profit will start declining.

before the point of MR= MC , the firm faces a situation when MR > MC, and its total revenue will be greater than its total costs which leads to abnormal profits.

Yes, in the long the firm earns only normal profits. i.e. MR=MC . when MR>MC the firm will produce more because they can get more revenue, and when MC>MR the firm stops production as they incur losses. So they would like to be at the level where MR=MC where they earn normal profits.

It cannot be horizontal straight line because TR cannot be the same . TR will increase when more units of commodity are sold. 

Because AR is nothing but the price of the good. So AR curve is the same as demand curve.