Deck 4: Market Structures and Pricing

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Question
Homogenous product means products are:

A)Similar
B)Close substitutes
C)Quite alike
D)None of the above
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Question
Monopoly means:

A)Single firm
B)No close substitutes
C)Barriers to entry
D)All of the above
Question
'Homogenous products' is a characteristic of:

A)Perfect competition only
B)Perfect oligopoly only
C)Both (a) and (b)
D)None of the above
Question
There is inverse relation between price and demand for the product of a firm under:

A)Monopoly only
B)Monopolistic competition only
C)Both under monopoly and monopolistic competition
D)Perfect competition only
Question
A firm is able to sell any quantity of a good at a given price. The firm's marginal revenue will be:

A)Greater than Average Revenue
B)Less than Average Revenue
C)Equal to Average Revenue
D)Zero
Question
Differentiated products is a characteristic of:

A)Monopolistic competition only
B)Oligopoly only
C)Both monopolistic competition and oligopoly
D)Monopoly
Question
Demand curve of a firm is perfectly elastic under:

A)Perfect competition
B)Monopoly
C)Monopolistic competition
D)Oligopoly
Question
Marginal revenue of a firm is constant throughout under:

A)Perfect competition
B)Monopolistic competition
C)Oligopoly
D)All the above
Question
A seller cannot influence the market price under

A)Perfect Competition
B)Monopoly
C)Monopolistic competition
D)All of the above
Question
There are only a few sellers under

A)Perfect Competition
B)Monopolistic competition
C)Monopoly
D)Oligopoly
Question
Under perfect competition, MR curve is:

A)Horizontal
B)Vertical
C)Falling
D)Rising
Question
When AR is above AC, firm earns:

A)Supernormal profit
B)Loss
C)Breakeven point
D)Minimise losses
Question
When AR = AC, firm is at:

A)Supernormal profit point
B)Loss making point
C)Breakeven point
D)Minimise losses point
Question
When AC is more than AR, what is the firm doing?

A)Making supernormal profit
B)Incurring loss
C)Having breakeven point
D)Minimising losses
Question
When AR passes through some point between minimum AVC and AC, it is called:

A)Supernormal profit
B)Loss
C)Breakeven point
D)Minimising losses
Question
When AR passes through minimum point of AVC, it is called:

A)Breakeven point
B)Shutdown point
C)Normal profit point
D)Supernormal profit point
Question
Breakeven point means:

A)AR = AC
B)TR = TC
C)No profit, no loss
D)All of the above
Question
Which of the following industries most closely approximates the perfectly competitive model?

A)Automobile
B)cigarette
C)newspaper
D)wheat farming.
Question
Given the supply of a commodity in the market period, the price of the commodity is determined by

A)the market demand curve alone
B)the market supply curve alone
C)the market demand curve and the market supply curve
D)none of the above.
Question
Total profits are maximized where

A)TR equals TC
B)the TR curve and the TC curve are parallel
C)the TR curve and the TC curve are parallel and TC exceeds TR
D)the TR curve and the TC curve are parallel and TR exceeds TC.
Question
The best, or optimum, level of output for a perfectly competitive firm is given by the point where

A)MR equals AC
B)MR equals MC
C)MR exceeds MC by the greatest amount
D)MR equals MC and MC is rising.
Question
At the best, or optimum, short-run level of output, the firm will be

A)maximizing total profits
B)minimizing total losses
C)either maximizing total profits or minimizing total losses
D)maximizing profits per unit.
Question
If P exceeds AVC but is smaller than AC at the best level of output, the firm is

A)making a profit
B)incurring a loss but should continue to produce in the short run
C)incurring a loss and should stop producing immediately
D)breaking even.
Question
At the shut-down point,

A)P =AVC
B)TR = TVC
C)the total losses of the firm equal TFC
D)all of the above.
Question
The short-run supply curve of the perfectly competitive firm is given by

A)the rising portion of its MC curve over and above the shut-down point
B)the rising portion of its MC curve over and above the break-even point
C)the rising portion of its MC curve over and above the AC curve
D)the rising portion of its MC curve.
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Deck 4: Market Structures and Pricing
1
Homogenous product means products are:

A)Similar
B)Close substitutes
C)Quite alike
D)None of the above
None of the above
2
Monopoly means:

A)Single firm
B)No close substitutes
C)Barriers to entry
D)All of the above
All of the above
3
'Homogenous products' is a characteristic of:

A)Perfect competition only
B)Perfect oligopoly only
C)Both (a) and (b)
D)None of the above
Both (a) and (b)
4
There is inverse relation between price and demand for the product of a firm under:

A)Monopoly only
B)Monopolistic competition only
C)Both under monopoly and monopolistic competition
D)Perfect competition only
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5
A firm is able to sell any quantity of a good at a given price. The firm's marginal revenue will be:

A)Greater than Average Revenue
B)Less than Average Revenue
C)Equal to Average Revenue
D)Zero
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6
Differentiated products is a characteristic of:

A)Monopolistic competition only
B)Oligopoly only
C)Both monopolistic competition and oligopoly
D)Monopoly
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7
Demand curve of a firm is perfectly elastic under:

A)Perfect competition
B)Monopoly
C)Monopolistic competition
D)Oligopoly
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8
Marginal revenue of a firm is constant throughout under:

A)Perfect competition
B)Monopolistic competition
C)Oligopoly
D)All the above
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9
A seller cannot influence the market price under

A)Perfect Competition
B)Monopoly
C)Monopolistic competition
D)All of the above
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10
There are only a few sellers under

A)Perfect Competition
B)Monopolistic competition
C)Monopoly
D)Oligopoly
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11
Under perfect competition, MR curve is:

A)Horizontal
B)Vertical
C)Falling
D)Rising
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12
When AR is above AC, firm earns:

A)Supernormal profit
B)Loss
C)Breakeven point
D)Minimise losses
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13
When AR = AC, firm is at:

A)Supernormal profit point
B)Loss making point
C)Breakeven point
D)Minimise losses point
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14
When AC is more than AR, what is the firm doing?

A)Making supernormal profit
B)Incurring loss
C)Having breakeven point
D)Minimising losses
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15
When AR passes through some point between minimum AVC and AC, it is called:

A)Supernormal profit
B)Loss
C)Breakeven point
D)Minimising losses
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16
When AR passes through minimum point of AVC, it is called:

A)Breakeven point
B)Shutdown point
C)Normal profit point
D)Supernormal profit point
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17
Breakeven point means:

A)AR = AC
B)TR = TC
C)No profit, no loss
D)All of the above
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18
Which of the following industries most closely approximates the perfectly competitive model?

A)Automobile
B)cigarette
C)newspaper
D)wheat farming.
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19
Given the supply of a commodity in the market period, the price of the commodity is determined by

A)the market demand curve alone
B)the market supply curve alone
C)the market demand curve and the market supply curve
D)none of the above.
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20
Total profits are maximized where

A)TR equals TC
B)the TR curve and the TC curve are parallel
C)the TR curve and the TC curve are parallel and TC exceeds TR
D)the TR curve and the TC curve are parallel and TR exceeds TC.
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21
The best, or optimum, level of output for a perfectly competitive firm is given by the point where

A)MR equals AC
B)MR equals MC
C)MR exceeds MC by the greatest amount
D)MR equals MC and MC is rising.
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22
At the best, or optimum, short-run level of output, the firm will be

A)maximizing total profits
B)minimizing total losses
C)either maximizing total profits or minimizing total losses
D)maximizing profits per unit.
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Unlock for access to all 25 flashcards in this deck.
Unlock Deck
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23
If P exceeds AVC but is smaller than AC at the best level of output, the firm is

A)making a profit
B)incurring a loss but should continue to produce in the short run
C)incurring a loss and should stop producing immediately
D)breaking even.
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24
At the shut-down point,

A)P =AVC
B)TR = TVC
C)the total losses of the firm equal TFC
D)all of the above.
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25
The short-run supply curve of the perfectly competitive firm is given by

A)the rising portion of its MC curve over and above the shut-down point
B)the rising portion of its MC curve over and above the break-even point
C)the rising portion of its MC curve over and above the AC curve
D)the rising portion of its MC curve.
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