Question 1

When there are only two sellers, the market is called as:
A)Oligopoly
B)Monopsony
C)Duopoly
D)Bilateral monopoly

Accepted Answer

A duopoly is a market structure where there are only two sellers or producers of a product or service.

Question 2

Perfect competition is a market situation under which a commodity is sold at:
A)Uniform price
B)Different price
C)Higher price
D)Lower price

Accepted Answer

In a perfect competition market structure, all firms sell identical products to many buyers, and no single buyer or seller has the power to influence the market price. Therefore, the commodity is sold at a uniform price determined by the forces of supply and demand.

Question 3

The demand curve of a firm under perfect competition is :
A)Inelastic
B)Perfectly inelastic
C)Infinitely elastic
D)Unitary elastic

Accepted Answer

Under perfect competition, the demand curve for a firm is perfectly horizontal (infinitely elastic) because the firm can sell any quantity of the product at the prevailing market price.

Question 4

The price of a commodity under the perfect competition is determined by:
A)Buyer
B)Seller
C)Firm
D)Market forces

Accepted Answer

In a perfect competition scenario, the price of a commodity is determined by the market forces of supply and demand, not by individual buyers, sellers, or firms.

Question 5

Equilibrium literally means:
A)Balance
B)Imbalance
C)Change
D)None of these

Accepted Answer

Equilibrium refers to a state of balance, where opposing forces or influences are in equal proportion, leading to a stable condition.

Question 6

The price at which the demand and supply are equal is called:
A)Normal price
B)Support price
C)Equilibrium price
D)Fair price

Accepted Answer

The equilibrium price is the price at which the quantity of goods demanded by consumers equals the quantity of goods supplied by producers, leading to a balance in the market.

Question 7

Cost of advertisement and salesmanship is called:
A)Sales cost
B)Selling cost
C)Dual price
D)None of these

Accepted Answer

The cost associated with advertisement and salesmanship is referred to as Selling cost. This includes all expenses related to promoting and selling products or services.

Question 8

Price leadership is a feature of:
A)Monopoly
B)Oligopoly
C)Duopoly
D)Monopolistic Competition

Accepted Answer

Price leadership typically occurs in oligopolistic markets where a few firms dominate the market and one firm often takes the lead in setting prices, which the others then follow.

Question 9

The market situation characterized by one buyer is:
A)Monopsony
B)Monopoly
C)Bilateral monopoly
D)Oligopsony

Accepted Answer

Monopsony is the market condition where there is only one buyer for a particular product or service, giving that buyer significant power over prices and terms of purchase.

Question 10

Under the Perfect competition, products are:
A)Heterogeneous
B)Homogenous
C)Semi-homogeneous
D)All of these

Accepted Answer

Under perfect competition, products are homogeneous, meaning they are identical or very similar in nature, making them perfect substitutes for one another.

Question 11

The demand curve of Monopoly firm is ----------slopped.
A)Downward
B)Upward
C)Positively
D)None of these

Accepted Answer

The demand curve of a monopoly firm is downward sloped, reflecting the inverse relationship between price and quantity demanded. This means as the price increases, the quantity demanded decreases, and vice versa.

Question 12

The payment given to the factor labour is known as:
A)Rent
B)Wage
C)Interest
D)profit

Accepted Answer

Wages are the payment given to labor for their services in production processes, typically based on hours worked or output produced.

Question 13

Monopoly is:
A)Presence of competition
B)Absence of competition
C)Both A & B
D)None of these

Accepted Answer

Monopoly is characterized by the absence of competition, where a single company or entity has exclusive control over a particular product or service in the market.

Question 14

A monopolist is a:
A)Price taker
B)Price maker
C)Policy maker
D)All of these

Accepted Answer

A monopolist is a price maker because it has significant control over the price of its product, due to the lack of close substitutes and competition in the market.

Question 15

Long run equilibrium price is also called:
A)Normal price
B)Abnormal price
C)Market price
D)Just price

Accepted Answer

Long run equilibrium price is referred to as "Normal price" because it is the price at which the quantity supplied equals the quantity demanded over a long period, reflecting the cost of production and the average consumer demand.

Question 16

Under perfect competition:
A)AR and MR are identical
B)AR is greater than MR
C)MR is lower than AR
D)None of these

Accepted Answer

Under perfect competition, the average revenue (AR) and marginal revenue (MR) are identical because the price remains constant regardless of the quantity sold.

Question 17

Firm and industry are the same under:
A)Perfect competition
B)Oligopoly
C)Monopoly
D)Duopoly

Accepted Answer

In a monopoly, a single firm constitutes the entire industry because it is the only producer of a particular good or service, making the terms "firm" and "industry" synonymous in this context.

Question 18

Kinked demand curve is found under:
A)Monopoly
B)Oligopoly
C)Perfect competition
D)Duopoly

Accepted Answer

The kinked demand curve model is primarily associated with oligopoly markets, where a few firms dominate the market and each is sensitive to the pricing and marketing strategies of the others. This model suggests that an oligopolistic firm will face a demand curve that is relatively more elastic for price increases and less elastic for price decreases, due to the interdependent nature of firms within such markets.

Question 19

The point at which the firm covers its variable cost is called:
A)Point of Inflexion
B)Equilibrium
C)Shut down
D)None of these

Accepted Answer

The point at which a firm covers its variable cost but not its total cost is referred to as the shutdown point. At this point, the firm is indifferent between continuing operations and shutting down temporarily, as it can cover its variable costs but not make a contribution to fixed costs.

Question 20

The equilibrium price in the short period is called:
A)Normal price
B)Abnormal price
C)Market price
D)Bogus price

Accepted Answer

The equilibrium price in the short period is referred to as the market price, which is determined by the forces of supply and demand in the market at a given time.

Quiz 16: Market Structures and Equilibrium

When there are only two sellers, the market is called as:

Perfect competition is a market situation under which a commodity is sold at:

The demand curve of a firm under perfect competition is :

The price of a commodity under the perfect competition is determined by:

Equilibrium literally means:

The price at which the demand and supply are equal is called:

Cost of advertisement and salesmanship is called:

Price leadership is a feature of:

The market situation characterized by one buyer is:

Under the Perfect competition, products are:

The demand curve of Monopoly firm is ----------slopped.

The payment given to the factor labour is known as:

Monopoly is:

A monopolist is a:

Long run equilibrium price is also called:

Under perfect competition:

Firm and industry are the same under:

Kinked demand curve is found under:

The point at which the firm covers its variable cost is called:

The equilibrium price in the short period is called: