CBSE Class 12 Economics Market Competition MCQs Set C

Question: What should a firm do when Marginal revenue is greater than marginal cost?
a) Firm should expand output
b) Effect should be made to make them equal
c) Prices should be covered down
d) All of these
Answer: a

Question: When the demand curve is perfect elastic,
a) increase in supply leads to decrease in quantity bought and sold
b) decrease in supply leads to increase in quantity bought and sold
c) Both a and b
d) None of the above
Answer: d

Question: Which is a characteristic of the market?
a) One Area
b) Presence of both Buyers and Sellers
c) Single Price of the Commodity
d) All the above
Answer: d

Question: Which of the following market types has a large number of firms that sell similar but slightly different products?
a) perfect competition
b) oligopoly
c) monopolistic competition
d) monopoly
Answer: c

Question: If supply remains constant, a rightward shift in demand curve causes the equilibrium price to —
a) rise
b) fall
c) remain constant
d) none of the above
Answer: a

Question: Which of the following is not a feature of perfect competition?
a) Large number of buyers and sellers
b) Homogeneity of product
c) Perfect knowledge of the market
d) Advertisement and selling cost
Answer: d

Question: _____ is a system of distribution of a specified quantity of a product at price fixed by the government
a) Black Market
b) Allocation by Seller’s Preference
c) Rationing
d) First come, first serve
Answer: c

Question: In a perfectly competitive market, which of the following is an example of a firm’s short-run decision?
a) what price to charge buyers for the product
b) whether or not to enter or exit an industry
c) the profit-maximizing level of output
d) how much to spend on advertising and sales promotion
Answer: c

Question: What does point A represent
a) Excess Supply
b) Shortage in Demand
c) None of the above
d) Both a and b
Answer: d

Question: If the technology for producing a good enables one firm to meet the entire market demand at a lower price than two or more firms could, then that firm has
a) a legal barrier to entry
b) a natural monopoly
c) increasing average total costs
d) patented the market
Answer: b

Question: Price of a good is determined at a point where
a) Demand > Supply
b) Demand < Supply
c) Demand = Supply
d) None of these
Answer: c

Question: When the price is 1000, what must happen to the quantity demanded for it to achieve equilibrium
a) it should remain the same
b) it should decrease
c) it should increase
d) none of the above
Answer: b

Question: ______ is a place where goods are sold illegally at prices higher than a legally fixed price by the government
a) White bazaar
b) Black Market
c) Ration Market
d) Piracy market
Answer: b

Question: Which of the following statements is correct?
a) The market demand and the firm’s demand are the same for a monopoly
b) Monopolies have perfectly inelastic demand for the product sold
c) Monopolies are guaranteed to earn an economic profit
d) All of the above are correct
Answer: a

Question: Which of the following four-firm concentration ratios would be the best indication of a perfectly competitive industry?
a) 100 percent
b) 78 percent
c) 0.25 percent
d) 31 percent
Answer: c

Question: Price ceiling is imposed on goods like
a) wheat
b) oil
c) rice
d) all of the above
Answer: d

Question: If you have found the percentage of the value of sales accounted for by the four largest firms in an industry, you have found the
a) elasticity of supply value
b) Herfindahl-Hirschman Index
c) elasticity of demand value
d) four-firm concentration ratio
Answer: d

Question: The law of equi-marginal utility considers price of money as
a) Zero
b) Less than one
c) More than one
d) One
Answer: d

Question: Which barrier to entry is an exclusive right granted to the author or composer of a literary, musical, dramatic or artistic work?
a) government license
b) patent
c) public franchise
d) copyright
Answer: d

Question: Marketing consists of what?
a) selling at a lower price than rivals sell for
b) producing more output to lower average costs
c) advertising and packaging
d) None of the above answers are correct
Answer: c

Question: When economists speak of the utility of a certain good, they are referring to
a) the demand for the good
b) the usefulness of the good in consumption
c) the satisfaction gained from consuming the good
d) the rate at which consumers are willing to exchange one good for another
Answer: c

Question: Not a condition of equilibrium of monopoly firm:
a) Average revenue = Marginal revenue
b) Marginal revenue = Marginal cost
c) Marginal cost curve cuts marginal revenue curve from downwards
d) Both (b) and (c)
Answer: a

Question: In a perfectly competitive market, the type of decision a firm has to make is different in the short run than in the long run. Which of the following is an example of a perfectly competitive firm’s long-run decision?
a) what price to charge buyers for the product
b) how much to spend on advertising and sales promotion
c) the profit-maximizing level of output
d) whether or not to enter or exit an industry
Answer: d

Question: At what price is the ceiling price set
a) OP1
b) OP2
c) OP3
d) None of the options
Answer: c

Fill in the blanks:

Question: Price discrimination is possible in ……………….. market.
Answer: Monopolistic

Question: If the supply of any good remains unchanged, and with the increase in demand its ……………….. increases.
Answer: Increase

Question: Price ceiling is done by the ………………..
Answer: Government

Question: In ………………..market there should be two or more two firms.
Answer: Oligopoly

Question: The market for petrol is ………………..
Answer: International.

Question: The other name of minimum determined price is ………………..
Answer: Price floor

Question: ………….. presented FAD principle.
Answer: Prof. Amartya Sen

State true or false:

Question: Normal price is imaginary.
Answer: True

Question: The forces of demand and supply remains in the state of equilibrium for a long period.
Answer: False

Question: Under perfect competition firms themselves determine the price.
Answer: False

Question: Main objective of price range determination is to earn profit.
Answer: False

Question: In independent market system, prices of goods and services are determined by the forces of demand and supply.
Answer: True

Match the following:

Question:

    ‘A’                                                     ‘B’
1. Price range                           (a) Excess supply
2. Price floor                             (b) Public Distribution System
3. Problem of price floor           (c) Minimum wage provision.
Answer:

        ‘A’                                                  ‘B’
1. Price range                           (b) Public Distribution System
2. Price floor                             (c) Minimum wage provision.
3. Problem of price floor           (a) Excess supply