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    MCQ Unit 3

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    rohan.raut17
    The document contains 10 multiple choice questions about concepts related to market structures and firm behavior including perfect competition, monopolistic competition, monopoly, oligopoly, price-taking firms, economies of scale, and supernormal profits. It also contains a brief definition of economies of scale.

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    © All Rights Reserved
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    MCQ Unit 3

    Uploaded by

    rohan.raut17
    3 views5 pages
    The document contains 10 multiple choice questions about concepts related to market structures and firm behavior including perfect competition, monopolistic competition, monopoly, oligopoly, price-taking firms, economies of scale, and supernormal profits. It also contains a brief definition of economies of scale.

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    © © All Rights Reserved

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    The document contains 10 multiple choice questions about concepts related to market structures and firm behavior including perfect competition, monopolistic competition, monopoly, oligopoly, price-taking firms, economies of scale, and supernormal profits. It also contains a brief definition of economies of scale.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    3 views5 pages

    MCQ Unit 3

    Uploaded by

    rohan.raut17
    The document contains 10 multiple choice questions about concepts related to market structures and firm behavior including perfect competition, monopolistic competition, monopoly, oligopoly, price-taking firms, economies of scale, and supernormal profits. It also contains a brief definition of economies of scale.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    MCQs Unit 3

    1. Which of the following is true about a price-taking firm?


    (a) It is in contact with rival firms to fix the best price that
    all of them can change
    (b) It is unable to influence the price of the product that it
    sells
    (c) It is asking the government to set a fixed price for its
    product
    (d) It can set the price of a product at any level that it
    wants

    2. Perfect competition involves:


    (a) Sellers working together to set prices
    (b) A large number of buyers & sellers
    (c) Difficulty entering & exiting the market
    (d) Little information is available to buyers

    3. If the entire output of a market is produced by a single


    seller, the firm

    (a) Is a monopoly.
    (b) Faces perfectly inelastic demand.
    (c) Can charge any price it wants and not lose customers.
    (d) Is producing a new product.

    4. If there are many firms in an industry producing goods


    that are similar but slightly different, this is an example of
    (a) Perfect competition.
    (b) Monopolistic competition.
    (c) Oligopoly.
    (d) Monopoly.

    5. If a monopolist is producing a level of output where MR


    exceeds MC, then it should

    (a) Raise its price.


    (b) Increase its output.
    (c) Lower its output.
    (d) Shift its marginal cost curve upward.

    6. Product Differentiation refers to


    (a) Features that make one product appear different
    from competing products in the same market.
    (b) Different prices for the same product in a certain
    market.
    (c) The selling of identical products in different markets.
    (d) The charging of different prices for the same product
    in different markets.

    7. Firms face competition when the good they produce


    (a) is unique
    (b) has a close substitute
    (c) is in a market with natural barriers to entry
    (d) is in a market with legal barriers to entry

    8. Supernormal profits occur, when


    (a) Total revenue is equal to Total cost
    (b) Total revenue is equal to variable cost
    (c) Average revenue is more than Average cost
    (d) Average revenue is equal to Average cost

    9. If under perfect competition, the price line lies below the


    average cost curve, the firm would
    (a) Make only Normal profits
    (b) Incur losses
    (c) Make abnormal profit
    (d) Profit cannot be determined

    10. The demand curve of the firm and industry will be


    same in which form of market
    (a) Monopolistic competition.
    (b) Perfect competition
    (c) Monopoly
    (d) Oligopoly
    In the long run, when average
    cost per unit decreases as output
    increases, we say that
    there are economies of scale in
    production.
    In the long run, when average
    cost per unit decreases as output
    increases, we say that
    there are economies of scale in
    production.
    In the long run, when average
    cost per unit decreases as output
    increases, we say that
    there are economies of scale in
    production.

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