CBSE Class 12 Economics Non Competitive Markets MCQs Set B

Question. The concept of the supply curve is relevant only for?
(a) Oligopoly
(b) Monopoly
(c) Monopolistic Competition
(d) Perfect Competition

Answer : D

Question. In perfect competition, a company earns an abnormal profit when average revenue exceeds the?
(a) Total revenue
(b) Average cost
(c) Total fixed cost
(d) Marginal revenue

Answer : B

Question. Price discrimination can take place only in
(a) Perfect competition
(b) Oligopoly
(c) Monopolistic competition
(d) Monopoly

Answer : D

Question. A new firm can easily enter a/an_____ market.
(a) Oligopoly
(b) Monopoly
(c) Perfectly competitive
(d) Duopoly

Answer : C

Question. Marginal cost pricing is generally followed by
(a) Private enterprises
(b) Small and medium enterprises
(c) Public sector enterprises
(d) Large private MNCs

Answer : C

Question. Which pricing strategy uses various class distinction?
(a) Marginal cost pricing
(b) Price discrimination
(c) Product line pricing
(d) Mark-up pricing

Answer : C

Question. A perfectly competitive firm definitely earns an economic profit in the short run if price is
(a) equal to average total cost.
(b) greater than average total cost.
(c) greater than average variable cost.
(d) equal to marginal cost.

Answer : B

Question. A perfectly competitive firm will continue to operate in the short run when the market price is below its average total cost if the
(a) marginal cost is minimized
(b) price is at least equal to the minimum average variable cost.
(c) price is also less than the minimum average variable cost.
(d) marginal revenue is greater than marginal cost

Answer : B

Question. In perfect competition, when the marginal revenue and marginal cost are equal, profit it?
(a) Zero
(b) Average
(c) Maximum
(d) Negative

Answer : B

Question. Which market has characteristics of product differentiation
(a) Monopolistic competition
(b) Oligopoly
(c) Monopoly
(d) Perfect competition

Answer : A

Question. In an oligopoly, output is
(a) greater than the output in perfect competition.
(b) somewhere between the output in monopoly and that in perfect competition outcomes.
(c) in all circumstances the same as the output in perfect competition.
(d) less than the output in monopoly.

Answer : B

Question. When firms in monopolistic competition are making an economic profit, firms will
(a) enter the industry, and demand will decrease for the original firms.
(b) exit the industry, and demand will increase for the firms that remain.
(c) enter the industry and then will exit the industry.
(d) enter the industry, and demand will increase for the original firms.

Answer : A

Question. Monopolist maximizes profit at the point where
(a) MC = AC
(b) MC = MR
(c) AC = AR
(d) MR = AR

Answer : B

Question. For a firm with monopoly power
(a) Price equals MC
(b) Price is less than MC
(c) Price exceeds MC
(d) None of the options

Answer : C

Question. Selling more than one product at a single price
(a) Dumping
(b) Bundling
(c) Discounting
(d) Off loading

Answer : B

Question. With an average cost pricing rule, the quantity produced by the natural monopoly is ________ the quantity produced with a marginal cost pricing rule.
(a) less than
(b) greater than
(c) not comparable to
(d) equal to

Answer : A

Question. With a natural monopoly
(a) no regulation is necessary because it is a natural monopoly.
(b) regulation takes the form of breaking the company into several competing firms.
(c) regulation takes the form of forcing the company out of business.
(d) regulation can take the form of average cost pricing to allow coverage of costs.

Answer : D

Question. For a natural monopoly, economies of scale
(a) lead to a legal barrier to entry.
(b) exist along the long-run average cost curve at least until it crosses the market demand curve.
(c) and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve.
(d) None of the options

Answer : B

Question. A monopoly
(a) must determine the price it will charge.
(b) cannot price discriminate because such a pricing strategy is illegal in the United States.
(c) faces extensive competition from firms making close substitutes.
(d) has no control over the price it must charge.

Answer : A

Question. A monopoly is a market with
(a) no barriers to entry.
(b) many substitutes.
(c) one supplier.
(d) many suppliers each producing an identical product.

Answer : C

Question. When a negative sloping straight-line demand curve, the total revenue curve is.
(a) A rectangle hyperbola
(b) Convex to the original
(c) An inverted vertical parabola
(d) Concave to the origin

Answer : C

Question. Which market has characteristics of product differentiation
(a) Monopolistic competition
(b) Oligopoly
(c) Monopoly
(d) Perfect competition

Answer : A

Question. Nature of demand curve under monopolistic competition is
(a) Less elastic
(b) More elastic
(c) Perfectly inelastic
(d) Perfectly elastic

Answer : D

Question. In the long run, a firm in monopolistic competition, will earn
(a) excess profit
(b) loss
(c) normal profit
(d) may earn any of the above

Answer : C

Question. The demand curve facing a single-price monopoly is
(a) the same as only the marginal revenue curve.
(b) the same as both the marginal revenue curve and the marginal cost curve.
(c) below the marginal revenue curve.
(d) above the marginal revenue curve.

Answer : D

Question. For a monopoly, marginal revenue is equal to
(a) the price of the product.
(b) the amount people buy between two prices.
(c) the amount people buy at a given price.
(d) the change in total revenue brought about by a one-unit increase in quantity sold

Answer : D

Question. A price-discriminating monopoly is a monopoly that
(a) sells its output at a single price to all of its customers.
(b) illegally charges different customers different prices for the good it produces.
(c) sells different units of a good or service at different prices.
(d) has control over the resources used to produce the product.

Answer : C

Question. In monopolistic competition there are ________ barriers to entry, so therefore in the long run, economic profit ________.
(a) no; is substantial
(b) many; equals zero
(c) no; equals zero
(d) many; is substantial

Answer : C

Question. When a negative sloping straight-line demand curve, the total revenue curve is.
(a) A rectangle hyperbola
(b) Convex to the original
(c) An inverted vertical parabola
(d) Concave to the origin

Answer : C

Question. A monopolistic is a price
(a) Acceptor
(b) Taker
(c) Giver
(d) Maker

Answer : B

Question. The firm’s over-riding objective is to
(a) maximize economic profit.
(b) avoid an economic loss.
(c) maximize total revenue.
(d) maximize normal profit.

Answer : A

Question. Which of the following is true about monopolistic competition but false about perfect competition?
(a) Firms can earn an economic profit in the short run.
(b) There are a large number of independently acting sellers.
(c) There are no barriers to entry.
(d) Firms compete on their product’s price as well as its quality and marketing.

Answer : D

Question. When oligopolies operate like firms in perfect competition, the firms produce at the point where the
(a) price exceeds the average total cost by the greatest amount.
(b) price exceeds the marginal cost by the greatest amount.
(c) marginal cost equals the average total cost.
(d) marginal cost equals the price.

Answer : D

Question. A monopoly creates a deadweight loss because the monopoly
(a) sets a price that is too low.
(b) produces less than the efficient quantity.
(c) produces more than the efficient quantity.
(d) does not maximize profit.

Answer : B

Question. A price-discriminating monopoly
(a) cannot offer discounts.
(b) cannot control the price of its product.
(c) sells a larger quantity than it would if it were a single-price monopoly.
(d) is illegal.

Answer : C

Question. Compared to a perfectly competitive industry, a single-price monopoly produces
(a) the same output.
(b) more output.
(c) less output.
(d) None of the options

Answer : C

Question. In the long run, existing firms exit a perfectly competitive market
(a) only if economic profits are zero.
(b) only if they incur an economic loss.
(c) if they earn a positive economic profit.
(d) if they either earn only a normal profit or if they incur an economic loss.

Answer : B

Question. In the long run, a perfectly competitive firm
(a) makes zero economic profit.
(b) makes an economic profit.
(c) can make an economic profit, zero economic profit, or incur an economic loss.
(d) incurs an economic loss.

Answer : A

Question. Under perfect competition price is determined by
(a) Total demand and supply
(b) Price leader
(c) The government
(d) Dominant seller

Answer : A

Question. A Monopolist usually produces
(a) Less than optimum output
(b) More than optimum output
(c) Optimum output
(d) Minimum output

Answer : A

Question. An oligopolist faces
(a) A Smooth downward sloping demand curve
(b) Horizontal demand curve
(c) Kinked demand curve
(d) Upward sloping curve

Answer : C

Question. Which of the following situation prevails for a firm under monopoly market?
(a) Price taker
(b) Price maker
(c) Price giver
(d) Price determiner

Answer : B

Question. Price discrimination is an essential feature of
(a) Perfect competition
(b) Oligopoly
(c) Duopoly
(d) monopoly

Answer : D

Question. In a monopsony market there is:
(a) Single seller
(b) single buyer
(c) Two sellers
(d) two buyers

Answer : B

Question. A discriminating monopolist will charge a higher price from which group of customers?
(a) Group with more elastic
(b) Group with less elastic
(c) Group with Unitary Elastic
(d) Group with Infinitely Elastic

Answer : B

Question. Supernormal profit refers to
(a) High proportion of net profit
(b) Minimum necessary profit to induce an entrepreneur to remain in business
(c) Unexpectedly high Profit
(d) Residual surplus

Answer : A

Question. The marker structure with Perfect mobility of factors and products is called
(a) Perfect competition
(b) Monopoly
(c) Monopolistic competition
(d) Oligopoly

Answer : A

Question. The condition of short run equilibrium under perfect competition is
(a) MC=MR
(b) AC=MR
(c) AC=AR
(d) AR=Selling cost

Answer : A

Question. With perfect price discrimination, the level of output
(a) is the same as the amount produced by any monopoly that price discriminates.
(b) equals the amount produced by a single-price monopoly.
(c) is the same as the amount produced in a perfectly competitive market.
(d) exceeds the efficient quantity.

Answer : C

Question. A Profit maximizing monopolist will produce the level of the output at which
(a) Average revenue is equal to average total cost
(b) Average revenue is equal to marginal cost
(c) Marginal revenue is equal to marginal cost
(d) Total revenue is equal to opportunity cost

Answer : C

Question. Price discriminations is possible except
(a) a commodity is non-transferable
(b) when customers do not meet each other
(c) when customers are ignorant about price differentials
(d) All of the above

Answer : D

Question. For a perfectly competitive firm, marginal revenue is
(a) equal to the change in profit from selling one more unit.
(b) less than the price.
(c) equal to the price.
(d) undefined because the firm’s demand curve is horizontal.

Answer : C

Question. A firm in monopolistic competition, faces a demand curve that is
(a) Negatively sloping and relatively elastic
(b) Negatively sloping and relatively inelastic
(c) Negatively sloping and unitary elastic
(d) Upward sloping and relatively elastic

Answer : A

Question. The marker structure which have large number of sellers selling differentiated product is called
(a) Perfect competition
(b) Monopoly
(c) Monopolistic competition
(d) Oligopoly

Answer : C

Question. Demand curve of a firm under monopolistic competition is
(a) Parallel to X axis
(b) Parallel to Y axis
(c) Downward slopping
(d) Upward slopping

Answer : C

Question. Selling cost is a feature of
(a) Monopolistic competition
(b) Perfect competition
(c) Monopoly
(d) Bilateral monopoly

Answer : A

Question. Why do firms incur a selling cost under monopolistic competition?
(a) Large number of close substitutes in the market
(b) Large number of identical products in the market
(c) Homogeneous products in the market
(d) Large number of consumers in the market

Answer : A

Question. What is the relationship between AR and MR curves under monopolistic competition?
(a) AR > MR
(b) AR = MR
(c) AR < MR
(d) AR ≤ MR

Answer : A

Question. In a Perfect competitive market
(a) Firm is the price giver and the industry is a price taker
(b) Firm is the price taker and the industry is a price giver
(c) Both are price makers
(d) Both are price takers

Answer : D

Question. The following are conditions of perfect competition except
(a) Sellers are large in number
(b) Buyers are large in number
(c) Commodity produced is homogenous
(d) Commodity produced is differentiated

Answer : D