CBSE Class 12 Economics Market Competition MCQs Set 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 is a basic for the classification of the market?
a) Zero Competition (Monopoly)
b) Perfect Competition
c) Imperfect Competition
d) All the above
Answer: d

Question: Which of the following is a feature of perfect competition?
a) Large Number of Buyers and Sellers
b) Perfect Knowledge of the Market
c) Homogeneous Units of the Product
d) All the above
Answer: d

Question: In which market product differentiation is found?
a) Monopoly
b) Perfect Competition
c) Pure Competition
d) Monopolistic Competition
Answer: a

Question: Which of the following is true in perfect competition?
a) Firm’s demand curve is perfectly elastic
b) Firm is price-taker, not price-maker
c) AR = MR
d) All the above
Answer: d

Question: Which one is a feature of monopoly?
a) Restrictions of New Firm entry
b) Lack of Close Substitutes
c) Single Seller and Many Buyers
d) All of these
Answer: d

Question: Which one of the following is true for monopoly?
a) Demand curve slopes downward
b) Firm is price-maker
c) Price discrimination possibility arises
d) All the above
Answer: d

Question: Which one is a feature of monopolistic competition?
a) Imperfect Knowledge of the Market
b) Selling Cost
c) Differentiated Product
d) All the above
Answer: d

Question: A market in which there is free entry and exit, the market is:
a) Perfectly Competitive Market
b) Imperfect Competitive Market
c) Monopolistic Competitive Market
d) None of these
Answer: a

Question: What does a monopolist market show?
a) Distribution system
b) Production process
c) Nature of market
d) None of these
Answer: c

Question: Price discrimination is found in which market?
a) Perfect Competition
b) Pure Competition
c) Monopoly
d) Monopolistic Competition
Answer: c

Question: Which of the following is the feature of pure competition?
a) Perfect knowledge of the market
b) Homogeneity by products
c) Perfect mobility of factors
d) All the above
Answer: d

Question: Market situation where there is only one buyer is:
a) Monopsony
b) Monopoly
c) None of these
d) Duropoly
Answer: a

Question: The concept of monopolistic competition is given by:
a) Mrs. Robinson
b) Chamberlin
c) Hicks
d) Samuelson
Answer: b

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: In which market is AR equal to MR?
a) Imperfect competition
b) Oligopoly
c) Monopoly
d) Perfect competition
Answer: d

Question: Which factor determines Equilibrium Price?
a) Demand for Commodity
b) Supply of Commodity
c) Both (a) and (b)
d) None of the above
Answer: c

Question: “Price is determined by Demand and Supply.” Whose statement is this?
a) Jevons
b) Marshall
c) Walras
d) None of these
Answer: b

Question: Price of a commodity is determined at a point where:
a) Demand exceeds
b) Demand equals supply
c) Supply exceeds
d) None of these
Answer: b

Question: What is true for perfect competition market?
a) Price is determined by both Demand and Supply Forces
b) Price is determined by the industry
c) Each firm of the industry is Price-taker
d) All the above
Answer: d

Question: Who gave the concept of ‘Time Element’ in price determination process?
a) Marshall
b) Ricardo
c) Walras
d) J. K. Mehta
Answer: a

Question: How many categories of production duration have been made by Marshall on the basis of supply?
a) Four
b) Three
c) Seven
d) Two
Answer: b

Question: Which is a reason of change in demand?
a) Change in Consumer’s Income
b) Change in Prices of Related Goods
c) Population increase
d) All the above
Answer: d

Question: Which statement is correct?
a) Supply curve elasticity depends on time periodBoth
b) In very short period, supply is perfectly inelastic, price is affected by demand conditions  None of the above
c) (a) and (b)
d) None of the above 
Answer: a

Question: Market Price is found in:
a) Short Period Market
b) Very Long Period Market
c) Long Period Market
d) None of these
Answer: a

Question: The price of a good is determined by:
a) Government
b) Both demand and supply
c) Supply
d) Demand
Answer: b

Question: Market price is associated with:
a) Price of very short period
b) Normal price
c) All of these
d) Permanent price
Answer: a

Question: The price of a goods in perfect competition is determined by:
a) Demand and supply
b) Production cost
c) Marginal utility
d) Bargaining
Answer: a

Question: In perfect competition, a firm:
a) Determines price
b) Obtains price
c) Both (a) and (b)
d) None of these
Answer: b

Question: In very short period, supply will be:
a) Elastic
b) Perfectly elastic
c) Perfectly Inelastic
d) None of these
Answer: c

Question: Which is not a condition for equilibrium of a monopoly firm?
a) Average Revenue = Marginal Cost
b) Marginal Revenue = Marginal Cost
c) Marginal Cost should cut the Marginal Revenue Curve from below
d) Both (b) and (c)
Answer: a

Question: In perfect competition, there is…… profit
a) Normal
b) Zero
c) Maximum
d) None of these
Answer: a

Question: A Seller cannot influence the market price under:
a) Perfect Competition
b) Monopolistic Competition
c) Monopoly
d) All of these
Answer: a

Question: Which determines the equilibrium price?
a) Demand
b) Supply
c) Both (a) and (b)
d) None of the above
Answer: c

Question: Which is the component of factor price determination?
a) Wages
b) All of these
c) Interest
d) Rent
Answer: b

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

Question: Economic Rent is = ?
a) Actual Income – Transfer Earnings
b) Actual Income + Transfer Earnings
c) Transfer Earnings
d) None of these
Answer: a

Question: Which of the following is correct?
a) Demand of labour depends on its productivity.
b) Labour Demand comes from producer
c) Marginal productivity of labour is its maximum wage
d) All the above
Answer: d

Question: Main feature of perfectly competitive market is:
a) Large number of buyers and sellers
b) Homogeneous product
c) Uniform price
d) All of the above
Answer: d

Question: The market in which there is free entry and exit is:
a) Perfect competitions market
b) Monopolistic competition market
c) Imperfect competition market
d) None of these
Answer: a

Question: There is inverse relation between demand and price of goods in:
a) Only perfect competition
b) Only monopoly
c) Only monopolistic competition
d) Both (a) and (b)
Answer: a

Question: According to which economist “Price of a commodity is determined by the forces of demand and supply”:
a) Valros
b) Marshall
c) Jevons
d) None of these
Answer: b

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: Market price is found in:
a) Very long period market
b) Short period market
c) None of these
d) Long period market
Answer: b

Question: Demand curve of a firm is perfectly elastic in:
a) Monopoly
b) Perfect competition
c) Oligopoly
d) Monopolistic competition
Answer: b

Question: Administrative price is:
a) Both (a) and (b)
b) Price ceiling
c) None of these
d) Price floor
Answer: a

Question: Minimum support price of wheat is called:
a) Price ceiling
b) Price floor
c) Equilibrium price
d) Market price
Answer: b

Question: Which of the following is the component of instrument pricing:
a) None of these
b) Wages
c) Rent
d) Interest
Answer: d

Question: Which factors help in the determination of equilibrium price:
a) Supply
b) Demand
c) Both (a) and (b)
d) None of the above
Answer: d

Question: Which among the following statement is not true:
a) Demand of labor depends on its productivity
b) All of the above
c) Demand of labor is done by the producer
d) Marginal productivity of a labor is his maximum wages
Answer: b

Question: Excess demand can be seen in:
a) Fixed market price
b) Highest fixed price
c) None of these
d) Lowest fixed price
Answer: b

Question: The quantity to be sold by a firm under perfect competition is also fixed by the market.
a) True
b) False
c) None of these
d) Can’t say
Answer: a

Question: Under perfect competition, market price can be influenced by both buyers and sellers.
a) Cannot say
b) False
c) True
d) None of these
Answer: b

Very Short Answer Type Questions

Question: What is cooperative oligopoly?
Answer : When in an oligopoly market, the firms cooperate with each other in determining price and output, that situation is called cooperative oligopoly.

Question: In which market form is there product differentiation?
Answer : Monopolistic competition market

Question: What is meant by normal profit?
Answer : Normal profit is the minimum amount of profit which is required to keep an entrepreneur in production in the long run.

Question: What is price maker firm?
Answer : A price maker firm is one which can influence price on its own.

Question: Why AR is equal to MR under perfect competition?
Answer : AR is equal to MR under perfect competition because price is constant.

Short Answer Type Questions

Question: Why is the number of firms small in oligopoly? Explain.
Answer : The main reasons why the number of firms are small in oligopoly is that there are barriers which prevent enty of firms into industry. Patents, large captial requiremnts control over the critical raw meterials,e tc all prevents new firm from entering the industry. Only those who are able to cross these barriers able to enter and stay in market.

Question: Explain the implications of the following:
a) Interdependence between firms in oligopoly
b) Large number of sellers in perfect competition
Answer : A) Oligopolies are typically composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore, the competing firms will be aware of a firm’s market actions and will respond appropriately. Mutual interdependence exists when the actions of one firm has a major impact on the other firms in the industry.
B) A perfectly competitive market is dominated by the presence of large number of buyers and sellers of a commodity, which means that there is no such buyer or seller in the market whose purchase or sale is so large as to impact the total sale or purchase in the market. Each buyer/seller has only a fractional share in the market demand/market supply.