Q1. In which kind of market, a firm is a price taker?

  • Perfect competition
  • Monopoly
  • Monopolistic competition
  • Oligopoly

Ans. Perfect competition

Q2. A firm can sell more only at a lower price.’ To which market would you relate this statement?

  • Perfect competition
  • Monopoly
  • Oligopoly
  • Duopoly

Ans. Monopoly

Q3. In case of perfect competition:

  • A firm is able to charge higher price
  • A firm is able to charge uniform price
  • A firm is able to sell any amount at the prevailing price
  • Both (b) and (c)

Ans. Both (b) and (c)

Q4. Firm’s demand curve under monopoly shows:

  • No relationship between price and demand
  • Inverse relationship between price and demand
  • Positive relationship between price and demand
  • None of these

Ans. The inverse relationship between price and demand

Q5. Charging different prices from different buyers for the same good is called:

  • Price extension
  • Price contraction
  • Price discrimination
  • Price control

Ans. Price discrimination

Q6. Under monopoly, a firm has:

  • Partial control over price
  • Full control over price
  • No control over price
  • None of these

Ans. Full control over price

Q7. Which market induces cartels?

  • Perfect competition
  • Monopoly
  • Oligopoly
  • None of these

Ans. Oligopoly

Q8. In the context of monopolistic competition, which one of the following statements is correct?

  • Firm has full control over price
  • Horizontal straight line demand curve of the firm
  • Freedom of entry and exit
  • Selling costs do not exist

Ans. Freedom of entry and exit

Q9. Which characteristic of monopolistic competition is similar to monopoly?

  • One seller and large number of buyers
  • Full control over price
  • Freedom of entry and exit
  • Demand curve slopes downward

Ans. The demand curve slopes downward

Q10. If the demand curve of a firm is a horizontal straight line:

  • A firm can sell any amount at the existing price’
  • A firm can sell only a specified amount at the existing price
  • All firms will sell equal amount of a commodity
  • Firms can differentiate their product

Ans. A firm can sell any amount at the existing price

Q11. A firm can earn supernormal profits even in the long run under:

  • Perfect competition
  • Monopoly
  • Monopolistic competition
  • All of these

Ans. Monopoly

Q12. Compared with monopolistic competition, a firm’s demand curve under monopoly is:

  • Equally elastic
  • Less elastic
  • More elastic
  • Infinitely elastic

Ans. Less elastic

Q13. In monopolistic competition, the products are:

  • Homogeneous only
  • Homogeneous supported with advertisement
  • Differentiated only
  • Differentiated supported with advertisement

Ans. Differentiated supported with advertisement

Q14. The AR curve and industry demand curve are the same in the case of:

  • Monopoly
  • Oligopoly
  • Perfect competition
  • None of these

Ans. Monopoly

Q15. In the context of oligopoly, which one of the following is incorrect?

  • Small number of big firms
  • Perfect knowledge among the buyers
  • Indeterminate firm’s demand curve
  • Non price competition

Ans. Indeterminate firm’s demand curve

Q16. Under collusive oligopoly price is often decided by:

  • The industry
  • The firm
  • Price leader
  • None of these

Ans. Price leader

Q17. Homogeneous products are sold under:

  • Collusive oligopoly
  • Non- collusive oligopoly
  • Perfect oligopoly
  • Imperfect oligopoly

Ans. Perfect oligopoly

Q18. A market situation in which there are only two producers is called:

  • Monopoly
  • Oligopoly
  • Duopoly
  • None of these

Ans. duopoly

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