11th Grade > Economics - 1
NON-COMPETITIVE MARKETS MCQs
Total Questions : 25
| Page 2 of 3 pages
:
When market power is obtained through barriers to entry created by the government or a regulatory body, the market power is called legal market power.
Answer: Option C. -> horizontal
:
C
The demand curve for a perfectly competitive market is horizontal as the demand is perfectly elastic. This is because all firms can sell however much they want at the market price and at the market price only.
:
C
The demand curve for a perfectly competitive market is horizontal as the demand is perfectly elastic. This is because all firms can sell however much they want at the market price and at the market price only.
:
A monopoly is defined as a structure in which only one seller provides a good or service that has no close substitutes. This is different from perfect competition which we have seen earlier.
Answer: Option D. -> Monopolistic competition
:
D
When products are differentiated and not perfect substitutes of each other, it results in a market structure called as monopolistic competition.
:
D
When products are differentiated and not perfect substitutes of each other, it results in a market structure called as monopolistic competition.
:
When market power is obtained through barriers to entry created by the government or a regulatory body, the market power is called natural market power.
Answer: Option A. -> Perfect competition
:
A
Social surplus is maximized in case of perfect competition since resources allocation is controlled by the invisible hand of market demand are supply.
:
A
Social surplus is maximized in case of perfect competition since resources allocation is controlled by the invisible hand of market demand are supply.
Answer: Option B. -> False
:
B
Even though monopolies are price makers, the quantity they can sell at any price depends on the market demand. Hence, monopolies cannot generate unlimited profits by driving up the prices.
:
B
Even though monopolies are price makers, the quantity they can sell at any price depends on the market demand. Hence, monopolies cannot generate unlimited profits by driving up the prices.
Answer: Option A. -> MR
:
A
The slope of the TR curve is MR or marginal revenue.
:
A
The slope of the TR curve is MR or marginal revenue.
Answer: Option D. -> 1600
:
D
Let us add the total revenue column using the relation TR=P×Q
Price(Rs)QuantityTR710070062001200530015004400160035001500
We can see that maximum revenue of the firm is Rs 1600.
:
D
Let us add the total revenue column using the relation TR=P×Q
Price(Rs)QuantityTR710070062001200530015004400160035001500
We can see that maximum revenue of the firm is Rs 1600.
Answer: Option B. -> AR
:
B
For a monopoly firm,
TR=P×QAR=TRQ=P×QQ=P
:
B
For a monopoly firm,
TR=P×QAR=TRQ=P×QQ=P
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