1. The basic behavioural principle which apply to all market conditions _________ (a) A firm should product only if its TR ≥ TVC
(b) A firm should produce at a level where its MC= MR
(c) MC curve cuts the MR curve from below
2. Total revenue can be found out by________
(b) TR/Q
(c) AR/dxq
3. When marginal revenue is zero, total revenue will be________
(a) Lowest
(b) Highest
(c) Negative
(d) Zero
Answer:- Highest
4. If MR < 0, then the TR will be ________
(a) Rising
(b) Highest
(c) Falling
(d) Zero
Answer:- Falling
5. The change in the total revenue that results from a one unit change in sales is _______
(a) Total revenue(b) Marginal revenue
(c) Average revenue
(d) None of the above
6. The revenue per unit of one commodity sold is called as ___________
(a) Total revenue
(b) Marginal revenue
(c) Average revenue
(d) None of the above
Answer:- Average Revenue
7. AR can be found out by the formula_
(a) TRn-TRn-1
(b) TR/Q
(c) MR x q
(d) TR/Q
Answer:- TR/Q
8. If a producer sells 4 units of a good at Rs 10 per unit and 5 units at Rs 8 per uint, marginal revenue would be __
(a) 0
(b) 1
(c) 2
(d) 3
Answer:- 2
9. Which of the following types of competition is just a theoretical economic concept, not a realistic case where actual competition and trade take place?
(a) Monopoly
(b) Oligopoly
(c) Perfect Competition
(d) Monopolistic Competition
Answer:- Perfect Competetion
10. Free Entry / Exit is a characteristic feature of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) (a) and (c
Answer:- (a) and (c)
11. When demand and supply increase equally, then ________
(a) Both equilibrium price and equilibrium quantity remain unchanged.
(b) Both equilibrium price and equilibrium quantity increase
(c) Equilibrium price remains unchanged but equilibrium quantity increase
(d) Equilibrium price changes but equilibrium quantity remains unchanged
Answer:- Equilibrium price remains unchanged but equilibrium quantity increase
12. If increase in demand is more than increase in supply then _________
(a) Equilibrium price will fall but equilibrium quantity will increase
(b) Equilibrium price will increase but Equilibrium quantity will decrease
(c) Both Equilibrium price and Equilibrium quantity will increase
(d) Both Equilibrium price and Equilibrium quantity will decrease
Answer:- Both Equilibrium price and Equilibrium quantity will increase
13. When demand increase equilibrium price will increase only if _________
(a) Supply also increases
(b) Supply also decreases
(c) Supply remain same
(d) If the elasticity remains the same
Answer:- Supply remain same
14. The equilibrium price remains constant only if demand and supply
(a) Increase unequally
(b) Decrease unequally
(c) Increase equally
(d) None of the above
Answer:- increase equally
15. The price will decrease if demand remains same and _________
(a) Supply increases
(b) Supply decreases
(c) Supply is more than the previous level
(d) None of these
Answer:- supply increase
16. The inter – action of market demand and supply curve determines the _________
(a) Equilibrium price
(b) Reserve price
(c) Both a & b
(d) None of these
Answer:- Equilibrium Price
17. Uniform price for homogeneous product at any one time is the essential condition of ___________
(a) Monopolistic competition
(b) Oligopoly
(c) Perfect competition
(d) Duopoly
Answer:- Perfect competetion
18. For maximizing profit, the condition is __________
(a) AR = AC
(b) MR = AR
(c) MR = MC
(d) MC = AC
Answer:- MR=MC
19. MC = MR = AR means equilibrium position of a firm __________
(a) In the long period
(b) In the short period under imperfect competition
(c) In the short period under perfect competition
(d) Under perfect competition
Answer:- In the short period under perfect competetion
20. Under perfect competition __________
(a) MC = Price
(b) MC > Price
(c) MC < Price
(d) None of these
Answer:- MC=Price
21. An increase in demand for a commodity causes __________
(a) An increase in equilibrium price
(b) An increase in equilibrium quantity
(c) Both a & b
(d) None of these
Answer:- An increase in equilibrium price
22. The demand curve of a commodity faced by a competitive firm is ___________
(a) Very elastic
(b) Perfectly inelastic
(c) Very inelastic
(d) Perfectly elastic
Answer:- Perfectly Elastic
23. In the short period, a perfectly competitive firm earns __________
(a) Normal profit
(b) Super normal profit
(c) Can incur losses
(d) All the above
Answer:- All of the above
24. The following figure shows that ___________
(a) A firm is a price marker
(b) A firm is price taker
(c) An industry is price taker
(d) None of these
Answer:- A firm is a price taker
25. The figure above shows that the firm belong to __________
(a) Imperfect competitive market
(b) Monopoly
(c) Oligopoly
(d) Perfectly competitive market
Answer:- Perfect competetive market
26. The firm’s short run supply curve is its marginal cost curve above its average variable cost curve is correct about __________
(a) Perfectly competition
(b) Oligopoly
(c) Monopoly
(d) Duopoly
Answer:- Perfectly competetion
27. Under perfect competition the price of commodity __________
(a) Can be controlled by a firm
(b) Cannot be controlled by a firm
(c) Controlled up for some extent by a firm
(d) None of the above
Answer:- cannot be controlled by firm
28. AR and MR curve coincide in ____________
(a) Monopoly
(b) Monopolistic competition
(c) Perfect competition
(d) Oligopoly
Answer:- Perfect competetion
29. Perfectly elastic demand curve implies that __________
(a) The firm has no control over price
(b) The firm can sell any quantity at the ruling price
(c) The firm is price taker and output adjuster at ruling price
(d) All a, b, and c
Answer:- All a,b and c
30. Under perfect competition, if the AR curve lies below the AC curve, the firm would _______
(a) Make only normal profit
(b) Incur losses
(c) Make super normal profit
(d) Firm cannot determine profit
Answer:- incur losses
31. Short run supply curve of a perfectly competitive firm is represent by _________
(a) Short run MC curve
(b) Short run AC curve
(c) The part of the MC curve that lies above
(d) None of these
Answer:- The part of the MC curve that lies above
32. In the long run, equilibrium for a competitive firm is __________
(a) Perfect competition
(b) Monopoly
(c) Both a & b
(d) None of these
Answer:- Perfect competetion
33. Odd one out of the following:
(a) Firms are of optimum size earn normal profits only in long run
(b) Firms sell identical product at uniform price
(c) Firms are not of optimum size and earn super normal profits in long run
(d) Firms are free to move in or out of the industry
Answer:- Firms are not of optium size and earn super normal profits in long run
34. The industry’s demand curve and the average revenue curve are same in case of _______
(a) Perfect competition
(b) Monopoly
(c) Oligopoly
(d) None of the above
Answer:- monopoly
35. All the characteristic of monopolistic competition except _________
(a) Large number of buyers and sellers
(b) Freedom of entry and exist
(c) Excess production capacity in long run
(d) Full control over price of commodity
Answer:- Full control over price of commodity
36. Kinked demand curve shows _________
(a) Fall in price
(b) Rise in price
(c) Stability in price
(d) Both (a) and (b)
Answer:- Stability in price
37. The demand curve is undefined / uncertain _________ market structure
(a) Oligopoly
(b) Monopoly
(c) Perfect competition
(d) Monopolistic competition
Answer:- oligopoly
38. When demand is elastic, MR is __________
(a) Negative
(b) Positive
(c) Zero
(d) One
Answer:- Positive
39. The characteristic of monopolistic competition which is compatible with monopoly is _
(a) One seller and large number of buyers
(b) Full control over price
(c) Freedom of entry and exit
(d) Demand curve slopes downward
Answer:- Demand curves sloped downward
40. Firms have chronic excess production capacity in ________ market
(a) Duopoly
(b) Perfect competition
(c) Monopolistic competition
(d) Oligopoly
Answer:- Perfect competetion
41. The theory of monopolistic competition is developed by _________
(a) H.E. Chamberlin
(b) Mrs. Joan Robinson
(c) Dr. Marshall
(d) Nicholas Kaldor
Answer:- Dr. Marshall
42. The point where P = AC is called _________
(a) Profit earing point
(b) Loss making point
(c) Breakeven point
(d) Shut down point
Answer:- Breakeven point
43. TR is a straight positively sloping line from origin is under _________
(a) Perfect competition
(b) Monopoly
(c) Duopoly
(d) Oligopoly
Answer:- Perfect competetion
44. If a monopolist resorts to price discrimination, price will be higher in the market where demand is __________
(a) Unitary elastic
(b) Elastic
(c) Inelastic
(d) None of these
Answer:- Inelastic
45. Under collusive oligopoly, price is often decided by _________
(a) The industry
(b) The firm
(c) Price leader
(d) None of these
Answer:- The industry
46. Slope of firm’s demand curve = ∞ under perfect competition means demand curve is –
(a) Horizontal
(b) Vertical
(c) Positive
(d) Negative
Answer:- Horizontal
47. Price exceeds MC under monopoly, but not under perfect competition because
(a) In perfect competition AR = MR
(b) In perfect competition AR = MC
(c) In monopoly AR > MR
(d) All the above
Answer:- All of the above
48. IN long run, a monopolist produces ________ level of output and charge a ________ price than a firm under perfect competition market
(a) Lower; higher
(b) Lower; lower
(c) Higher; lower
(d) Higher; higher
Answer:- Lower, Higher
49. TR minus total explicit cost called __________
(a) Profit
(b) Economic profit
(c) Super normal profit
(d) Accounting profit
Answer:- Accounting Profit
50. Under perfect competition when price line (AR) passes through minimum point of AVC curve is called__________
(a) Minimum losses point
(b) Shut down point
(c) Breakeven point
(d) Profit point
Answer:- Breakeven Point
51. At the shutdown point, losses of a firm under perfect competition are equal to ________
(a) AVC
(b) TFC
(c) AC
(d) MC
Answer:- TFC
52. In the long run under monopolistic competition, profit maximizing profit is __________
(a) Less than least cost output
(b) More than least cost output
(c) Equal to least cost output
(d) None of the above
Answer:- Less than least cost output
53. A monopolist can determine _________
(a) Price
(b) Output
(c) Either price or output
(d) Both price and output
Answer:- Either price and output
54. A monopolistic competition firm has a position of ATC = price in the _________
(a) Short run equilibrium
(b) Very short run equilibrium
(c) Long run equilibrium
(d) Any period of time
Answer:- Short run Equilibrium
55. In perfect competition, in the long run, if new firms enter the industry the supply curve shifts to the right resulting in __________
(a) Fall in price
(b) Rise in price
(c) No change in price
(d) None of the above
Answer:- Fall in Price
56. The difference between least cost output and profit maximizing output is called_________
(a) Reserve capacity
(b) Excess capacity
(c) Normal capacity
(d) Abnormal capacity
Answer:- Excess capacity
57. The kink occur at _________
(a) Any price
(b) Prevailing price
(c) Any quantity
(d) To be determined price
Answer:- Prevailing price
58. Doctors, lawyers, consultants, services like power supply, telecommunication fees to different patients/clients. This is a _________ price discrimination
(a) First degree
(b) Second degree
(c) Third degree
(d) Both second and third degree
Answer:- First degree
59. Charging different prices by monopolists’ to customers in geographically separate market is a _________ degree of price discrimination
(a) First
(b) Second
(c) Third
(d) Price discrimination is not separate markets
Answer:- Third
60. Monopolist charging a price that takes away the entire consumer surplus is a case of __________ degree of price discrimination
(a) First
(b) Second
(c) Third
(d) None of the above
Answer:- First
61. Which of the following statements refer to ‘price leadership’
(a) Existence of perfect competition
(b) A form of price collusion
(c) Stiff competition
(d) The maintenance of a monopolistic price
Answer:- A form of price collusion
62. How many sellers usually exist in an oligopoly market?
(a) A large number of sellers
(b) One seller
(c) Few sellers
(d) Two sellers
Answer:- few seller
63. Long-run supply curve in the constant cost industry __________
(a) Slopes downward to the right
(b) Slopes upward to the right
(c) Is horizontal straight line
(d) None of the above
Answer:- Is horizontal straight line
64. The concept of group equilibrium is related to ____________
(a) Paul Sweezy
(b) Chamberlin’s monopolistic competition
(c) Perfect competition
(d) None of the above
Answer:- Chamberlin's monopolistic competetion
65. Dumping is an example of price discrimination which is __________ price discrimination
(a) Of first degree
(b) Of second degree
(c) Of third degree
(d) International
Answer:- International
66. _________ is the market structure where there is a single buyer:
(a) Monopsony
(b) Monopoly
(c) Oligopoly
(d) Duopoly
Answer:- Monopsony
67. At all the level of output AR = MR in __________
(a) A perfect competition market
(b) A monopoly market
(c) A oligopoly market
(d) All the above
Answer:- A perfect competetion market
68. Under perfect competition, the MC curve at equilibrium will be ___________
(a) Constant
(b) Rising
(c) Falling
(d) None of these
Answer:- Rising
69. Market price is the price that prevails in a __________
(a) Very short period market
(b) Short period market
(c) Long period market
(d) Secular period market
Answer:- Short period market
70. The market in which normal price prevails is a _________ market
(a) Market period
(b) Short period
(c) Long period
(d) Secular period
Answer:- Long period
71. Excess capacity is not found under _________
(a) Monopoly
(b) Monopolistic competition
(c) Oligopoly
(d) Perfect competition
Answer:- Perfect competetion
72. Which of the following is not a characteristic of a “price taker”?
(a) TR = P X Q
(b) AR = Price
(c) Negatively sloped demand curve
(d) Marginal Revenue = Price
Answer:- Negatively sloped demand curve
73. The sale of branded goods is common situation is case of __________
(a) Perfect competition
(b) Monopolistic competition
(c) Monopoly
(d) Pure competition
Answer:- Monopolistic competetion
74. Price is the value of good in terms of :
(a) Quality
(b) Money
(c) Substitutes value
(d) None of the above
Answer:- Money
75 . When demand & supply both increase in a same proportion
(a) Equilibrium quantity remains unchanged
(c) Equilibrium price remains same
(b) Price slightly increases
(d) Quantity slightly decreases
Answer:- Price slightly increase
76. When equilibrium of market takes place we get
(a) Excess demand > Excess supply
(b) Excess supply = Excess demand = zero
(c) Excess supply = Excess demand = one
(d) None
Answer:- Excess supply=Excess demand=zero
77. Find out MR for price ` 10 and Price elasticity of demand 0.2
(a) - 30
(b) - 40
(c) 40
(d) None of these
Answer:- -40
78. In this monopoly market, at equilibrium output ‘e’, it:
(a) Incurs loss(b) Enjoys profit
(c) Incurs loss but continues production
(d) All
Answer:- Incurs loss but continues production
79. For a rational monopolist, choose the suitable option from the following:
(a) Monopolist shuts down production.
(b) Monopolist continues production till point ‘e’ is reached.
(c) Monopolist continues production till ‘M’ point is reached.
(d) None.
Answer:- Monopolist continues production till point "e" is reached
80. Monopoly has no closed substitutes goods and therefore AR is :
(a) Parallel
(b) Downward
(c) Upward
(d) None
Answer:- Downward
81. Advertisement costs are
(a) Not required under Perfect Competition
(b) Not required under duopoly
(c) Required under Perfect Competition
(d) None
Answer:- Not required under perfect competetion
82. Which of the following is not a characteristic of a monopolistically competitive market?
(a) Free entry & exit
(b) Abnormal profits in the long run
(c) Many sellers
(d) Differentiated products
Answer:- Abnormal profits in the long run
83. In the Perfect Competition, if a new firm enters the industry in the long run, the supply curve:
(a) Shifts to the left
(b) Turns upwards
(c) Turns downwards
(d) Shifts to the right
Answer:- Shift to the right
84. In Perfect Competition, since the firm is a price taker, the __________ curve is straight line.
(a) Marginal cost
(b) Total cost
(c) Total revenue
(d) Average cost
Answer:- Total revenue
85. In the Perfect Competition, when the marginal revenue & marginal cost are equal, profit is __________.
(a) Maximum
(b) Average
(c) Zero
(d) Not possible
Answer:-Maximum
86. In Perfect Competition, a firm increases profit when __________ exceeds the _________.
(a) Total cost, Total revenue
(b) Marginal cost, Marginal revenue
(c) Total revenue, Total fixed cost
(d) Average revenue, Average cost
Answer:- Average revenue, Average cost
87. In the long run there is enough time for normal profits. This is because in the long run, all inputs are.
(a) Identical
(b) Homogeneous
(c) Variable
(d) Fixed
Answer:- Variable
88. In a perfectly competitive market, in the long run, competitive prices equal the minimum possible __________ cost of good.
(a) Marginal
(b) Variable
(c) Total
(d) Average
Answer:- Average
89. In the case of price discrimination price will be higher in the market where:
(a) Demand is perfectly elastic.
(b) Demand is highly elastic.
(c) Demand is unitary elastic.
(d) Demand is less elastic.
Answer:- Demand is less elastic
90. Price discrimination is undertaken with the aim of:
(a) Increasing sales & maximizing profits.
(b) Reducing sales & raising prices
(c) Minimising cost & maximizing revenue.
(d) Serving the markets without earning profits.
Answer:- Increasing sales and maximizing profits
91. Which of the following statements is correct?
(a) A monopolistic never earns losses.
(b) In a Perfectly Competitive Market, the products are differentiated.
(c) In a monopolistically competitive market, the products are differentiated.
(d) Perfect Competition makes equilibrium at loss in long run
Answer:- In a monopoly competetive market the products are differentiated
92. At point kink of Oligopoly
(a) Elasticity’s are same
(b) Slopes are same
(c) Differences in elasticity take place
(d) None.
Answer:- Differnece in elasticity take place
93. In Perfect Competition, necessary condition of short run equilibrium is _________.
(a) SMC=MR
(b) SMC>MR
(c) Slope of SMC > Slope of MR
(d) All
Answer:- All
94. If price is forced to stay below equilibrium price :
(a) Excess demand exists
(b) Excess supply exists
(c) Either a or b
(d) Neither a nor b
Answer:- Excess denabd exists
95. When equilibrium of market takes place we get
(a) Excess demand > Excess supply
(b) Excess supply = Excess demand = zero
(c) Excess supply = Excess demand = one
(d) None
Answer:- Excess supply = Excess demand = zero
96. Under perfect competition _________.
(a) MC = Price
(b) MC > price
(c) MC < price
(d) None of these
Answer:- MC= Price
97. Toothpaste Manufacturing Industry is an example of
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer:- Monopolistic.
98. Toilet Soaps Industry is an example of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer:- Monopolistic Competetion
99. Mobile Phone Service Providers is an example of
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer:- Oligopoly
100. The structure of the Cold Drink Industry in India is best described as
(a) Perfectly Competitive
(b) Monopolistic
(c) Monopolistically Competitive
(d) Oligopolistic
Answer:- Oligopolistic
0 Comments