Deck 2: Price Determination and Market Structures

Question 1

The importance of time element in price determination was firstly analyzed by

A)adam smith
B)alfred marshall
C)david ricardo
D)j m keynes

Answer 1

alfred marshall

Question 2

In the market period, price determination in the case of a perishable commodity is influenced by its

A)demand
B)supply
C)demand as well as the supply
D)none of the above

Answer 2

demand

Question 3

In the short-period,

A)all factors are fixed
B)some factors are fixed and others are variable
C)all factors are variable
D)none of the above

Answer 3

some factors are fixed and others are variable

Question 4

In the long-period,

A)all factors are fixed
B)some factors are fixed and others are variable
C)all factors are variable
D)none of the above

Question 5

Zero economic profit arises in the long run in the case of

A)perfect competition
B)monopoly
C)monopolistic competition
D)oligopoly

Question 6

Zero economic profit includes

A)zero normal profit
B)normal profit
C)super normal profit
D)average profit

Question 7

Economic efficiency is achieved in the long run in the case of

A)perfect competition
B)monopoly
C)monopolistic competition
D)oligopoly

Question 8

Consumer surplus will be maximum in the case of

A)perfect competition
B)monopoly
C)monopolistic competition
D)oligopoly

Question 9

At the optimum short-run level of output, the firm will be

A)maximizing total profit
B)minimizing total losses
C)either maximizing total profit or minimizing total losses
D)maximizing profit per unit

Question 10

The short-run supply curve of a perfectly competitive firm is given by

A)rising portion of the mc curve over and above the shut-down point
B)rising portion of the mc curve over and above the break-even point
C)rising portion of the mc curve over and above the ac curve
D)rising portion of the mc curve

Question 11

When the perfectly competitive firm and industry are both in long run equilibrium

A)p = mr = smc = lmc
B)p = mr = sac = lac
C)p = mr =lowest point on the lac curve
D)all of the above

Question 12

Monopolistic competition is characterized by

A)few firms' selling differentiated products
B)many firms selling homogeneous product
C)few firms selling homogeneous product
D)many firms selling differentiated products

Question 13

The theory of monopolistic competition was popularized by

A)marshall
B)keynes
C)chamberlin
D)pigou

Question 14

A monopolistically competitive market is distinguished from perfect competition by the fact that

A)few sellers
B)it has few buyers
C)it deals with differentiated products
D)none of the above

Question 15

Excess capacity is a hallmark of

A)perfect competition
B)monopoly
C)oligopoly
D)monopolistic competition

Question 16

Monopolistically competitive firms

A)are small in size
B)have small share in the market
C)are large in the size
D)both a and b

Question 17

Selling cost assumes paramount importance in

A)perfect competition
B)monopoly
C)monopolistic competition
D)none of the above

Question 18

Under monopolistic competition, there can be freedom of entry in the sense that there is freedom to produce

A)close substitutes
B)perfect substitutes
C)complements
D)none of the above

Question 19

A firm under monopolistic competition advertise because

A)to compete successfully with rival
B)to lower cost of production
C)to increase revenue and sales
D)since it cannot raise price

Question 20

In the case of monopolistic competition,

A)short run supply curve cannot be defined
B)mr curve cannot be defined
C)ar curve cannot be defined
D)none of the above

Question 21

Under monopolistic competition, super normal profit arise when

A)ar=ac
B)mr=mc
C)ar>ac
D)ar

Question 22

Which of the following condition are met in the long run equilibrium of the monopolistic competitor earning only normal profit

A)mc=ac
B)p=ac
C)p=mr
D)p=mc

Question 23

The term group equilibrium is referred to

A)duopoly
B)monopolistic competition
C)perfect competition
D)oligopoly

Question 24

Increase or decrease in the level of production by a monopolistically competitive firm have ------- impact on price and output decisions of other firms

A)very significant
B)significant
C)small
D)negligible

Question 25

Monopolistic competitive firm fixes the price of its product

A)independent of the price of close substitutes
B)close to the prices of close substitutes
C)at a very high level
D)none of the above